For the first quarter, Rite Aid posted a deeper net loss as the retailer continued to explore ways to drive future growth, including striking a deal with Amazon’s new Counter package pickup program.
The company reported a net loss from continuing operations of $99.3 million, or $1.88 per share, versus a net loss from continuing operations of $41.7 million, or 79 cents per diluted share, in the year-prior period.
Adjusted net loss from continuing operations in the quarter was $7.5 million, or 14 cents per share, versus net income from continuing operations of $1 million, or two cents per diluted share, in the year-earlier quarter. An analyst consensus estimate published by MarketBeat called for first quarter 2019 net earnings of two cents per diluted share.
Revenues slipped to $5.37 billion from $5.39 billion in the quarter a year previous, Rite Aid noted. Front-end comparable sales, including general merchandise but, in this case excluding cigarettes and tobacco products the company is restricting to customers over the age of 21, increased 0.3%.
“While first quarter results did not meet our expectations due to prescription reimbursement rate pressure in the retail pharmacy segment and margin compression in the pharmacy services segment, we are pleased with the improvements in our top-line growth and operating efficiency in the retail pharmacy segment and Medicare Part D revenue growth in the pharmacy services segment,” said John Standley, Rite Aid CEO. “Looking forward, enhancements made to the McKesson supply agreement, generic purchasing improvements, revenue growth and the benefits of actions we have taken to reduce costs should drive improved results in both segments for the remainder of the year. We expect to meet our full-year guidance. In addition, through our ‘Path to the Future’ transformation initiative, we are identifying significant opportunities to drive further growth and operating efficiency in fiscal 2021, with a focus on reducing our reliance on traditional pharmacy reimbursement rate models.”
Amazon’s new service, Counter, will create a network of staffed pickup points that gives consumers the option of picking up their Amazon packages at a partner location. Beginning June 27, Counter will be live at more than 100 Rite Aid stores across the United States. The service is expected to roll out to 1,500 Rite Aid locations by the end of the year.