Rite Aid, reconfiguring operations to deal with an evolving market, posted a net loss for the third quarter, acquired the 67-store Bartell Drug chain, announced the closure of 63 Rite Aid locations and advanced comparable sales in its front-end business.
For the third quarter, net loss from continuing operations was $36.1 million, or 67 cents per share, compared to $4.3 million, or eight cents per share, in the year-prior quarter.
Adjusted for one-time events, net income from continuing operations of $8.2 million, or 15 cents per share, versus $21.6 million, or 40 cents per share, in the year-earlier period.
Revenues from continuing operations for the quarter were $6.23 billion versus $6.12 billion in the year-before quarter. Growth at the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment, drove the 1.8% increase in revenues, Rite Aid indicated. Retail Pharmacy Segment sales were $4.43 billion in the quarter versus $4.11 billion in the year-previous period. The increase in Retail Pharmacy Segment sales resulted from higher comparable sales and the inclusion of Bartell Drug results this quarter.
Comps from continuing operations for the quarter increased 4.4% over the year-past period, consisting of a 5.9% increase in pharmacy sales and a 0.4% increase in front-end sales, including general merchandise. With cigarettes and tobacco products excluded, front-end comps gained 1%, Rite Aid pointed out. In a conference call Matt Schroeder, Rite Aid, evp and CFO, said front-end sales got a boost from health categories including take-home COVID tests, and he said the company expects to enjoy front-end margin benefits from the launch of a new loyalty program and expansion of own brands. In October, Rite Aid announced that it had acquired Bartell Drug, which operates in the Seattle area.
In the conference call, Heyward Donigan, Rite Aid president and CEO, said that, in addition to the Bartell acquisition, Rite Aid had benefited from services that expanded its outreach to consumers, doing a significant amount of advertising around the company’s delivery services, which he credited for driving a 900% increase in transactions through partners including Uber Eats and Postmates.
At the same time, Rite Aid has been conducting a store base assessment and, so, stated that it would shutter the 63 locations.
In announcing the financial results, Donigan said the company had initiated “the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million.”