Rite Aid beats by $0.02 (2.11 -0.02)
- Reports Q3 (Nov) net of breakeven, may not compare to the Capital IQ Consensus of ($0.02); revenues from continuing operations (ex divested stores) fell 5.6% year/year to $5.35 bln, not comparable to the $7.59 bln Capital IQ Consensus.
- Pharmacy Segment revenues were $4.0 billion and decreased 3.0% compared to the prior year period primarily as a result of a decrease in same store sales and reimbursement rates. Revenues in the company's Pharmacy Services Segment were $1.4 billion and decreased 12.2% compared to the prior year period, due to an election to participate in fewer Medicare Part D regions and a decline in commercial business. Same store sales from continuing operations for the quarter decreased 2.5% from the prior year, consisting of a 3.5% decrease in pharmacy sales and a 0.5% decrease in front-end sales. Pharmacy sales included an approximate 198 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, decreased 2.4% from the prior year period due in part to exclusion from certain pharmacy networks that Rite Aid participated in the prior year. Prescription sales from continuing operations accounted for 66.5% of total drugstore sales.
- "Our pro-forma Adjusted EBITDA from continuing operations for the third quarter of $153 million, which includes $24 million in fees that would have been received if all of the divested stores were being managed under the TSA Agreement as of the beginning of the period, was in line with our expectations," said Rite Aid Chairman and CEO John Standley.
- "The third quarter was a busy time for our team in preparing for and beginning the transfer of stores and related assets to Walgreens Boots Alliance... To date, we have transferred 357 stores and have received ~$715 million in proceeds, which we have used to pay down debt. Looking forward, in addition to completing the transfer process, we will continue to focus on our most significant business-building opportunities as we work together to deliver a great experience to our customers and patients."
- As previously announced on November 27, 2017, the company completed the pilot closing and first subsequent closing under the amended and restated asset purchase agreement with Walgreens Boots Alliance (WBA), resulting in the transfer of 97 Rite Aid stores and related assets to WBA during the third quarter. Under the amended and restated agreement, WBA will purchase a total of 1,932 stores, three distribution centers and related inventory from Rite Aid for an all-cash purchase price of $4.375 billion. Rite Aid and WBA expect to continue to transfer ownership of the stores in phases over the coming months.