As it continues to cope with conditions created by the COVID-19 pandemic, Rite Aid net income from continuing operations declined in the third quarter, but the company still beat a Wall Street estimate by 41 cents.
For the third quarter, Rite Aid posted net income from continuing operations of $4.3 million, or eight cents per share, versus $52.3 million, or 98 cents per share, in the year-before quarter.
Net income from continuing operations, adjusted for one-time events, was $21.6 million, or 40 cents per share, versus $29.1 million or 54 cents per share, in the period a year previous. Adjusted net income topped a MarketBeat consensus analyst estimate of a one-cent loss in the quarter.
Revenues were $6.12 billion versus $5.46 billion in the year-prior quarter.
In the Retail Pharmacy Segment, comparable sales increased 4.3% year over year while front-end sales, including general merchandise, decreased 0.7%. Revenues from continuing operations in the segment were $4.11 billion versus $3.91 billion in the period a year earlier.
The decline in net income, Rite Aid stated, was due primarily to a $55.7 million gain on debt retirements in the prior year and a decrease in adjusted EBITDA, down to $137.4 million from $158.1 million in the 2019 quarter, partially offset by lower restructuring-related costs and a higher gain on sale of assets resulting from the sale-leaseback of the company’s Perryman, MD, distribution center.
“We are pleased with our third quarter performance as we continue to grow our business and achieve major physical and digital milestones through our RxEvolution strategy,” said Rite Aid president and CEO Heyward Donigan. “We officially launched our new brand and logo, made substantial progress in evolving our merchandise mix to an assortment that best supports whole health, refreshed over 700 store exteriors, opened the first three new Store of the Future prototypes and began the integration of our two legacy PBMs. On the digital side, we launched a completely modernized Rite Aid online experience and mobile app and are set to launch our new member portal at Elixir. We are accelerating the key initiatives that support our strategy, and we will continue to deliver the operational excellence needed to achieve strong results as we generate cash flow, reduce debt and improve our leverage ratio.”