Rite Aid reported a challenging first quarter with a deeper net loss, following the scrapped merger deal with Walgreens, and the formation of a new pending agreement to sell about half its stores to its drug store rival.
For the first quarter ended June 3, Rite Aid Corp. posted a net loss of $75.3 million, or seven cents per diluted share, versus a net loss of $4.6 million, or zero cents per diluted share, in the previous first quarter. With one-time charges excluded, adjusted net loss was $52.4 million, or five cents per diluted share, versus net earnings of $16.3 million, or two cents per diluted share, in the year-prior quarter.
Rite Aid’s loss in the quarter was four cents per diluted share greater than anticipated in a MarketBeat analyst average estimate.
Revenues for the quarter were $7.78 billion compared to revenues of $8.18 billion in the prior year’s first quarter. The retail pharmacy segment reported revenues of $6.4 billion, down 4.9% versus the year-before period primarily due to a decrease in comparable store sales and reimbursement rates. Comps decreased 3.9% in the quarter year over year with pharmacy down 5% and front-end sales including general merchandise such as home goods down 1.5%.
About three weeks after the quarter closed, Walgreens and Rite Aid ended their merger agreement due to U.S. Federal Trade Commission opposition to the deal. Instead, Rite Aid agreed to a pending deal to sell 2,186 stores to Walgreens Boots as well as related distribution assets and inventory for an all-cash purchase price of $5.18 billion. In connection with the termination of the previous acquisition agreement, Walgreens Boots agreed to pay Rite Aid a termination fee in the amount of $325 million in cash.