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Rite Aid’s Net Income Rises In Q4

It was an active fourth quarter and fiscal year for Rite Aid, with the retailer selling some of its stores to Walgreens and forming a pending merger deal with Albertsons.

Revenues from continuing operations for the fourth quarter were $5.4 billion compared to revenues from continuing operations of $5.9 billion in the prior year’s fourth quarter. Same store sales from retail pharmacy continuing operations for the quarter decreased 1.7% over the prior year, consisting of a 2.3% decrease in pharmacy sales and a 0.6% decrease in front-end sales.

Net loss from continuing operations was $483.7 million or $0.46 per diluted share compared to last year’s fourth quarter net loss from continuing operations of $25.1 million or $0.02 per diluted share. The decline in operating results was due primarily to $325 million of income tax expense relating to the revaluation of the company’s deferred tax assets as a result of the 2017 Tax Act. Adjusted net loss from continuing operations was $10.3 million, or $0.01 per diluted share. For the fourth quarter, the company reported net income of $767.1 million, or $0.73 per diluted share.

For the fiscal year, revenues from continuing operations were $21.5 billion compared to revenues of $22.9 billion in the prior year. Same store sales from continuing operations for the year decreased 2.9%, consisting of a 3.9% decrease in pharmacy sales and a 0.8% decrease in front end sales.

Net loss from continuing operations for the fiscal year was $349.5 million or $0.33 per diluted share compared to last year’s net income from continuing operations of $4.1 million or $0.00 per diluted share. Adjusted net loss from continuing operations for fiscal 2018 was $20.2 million or $0.02 per diluted share compared to last year’s adjusted net income of $84.5 million or $0.08 per diluted share.

For the full year, the company reported net income of $943.5 million, or $0.90 per diluted share. Net income for the fourth quarter and the full year of fiscal 2018 includes an after-tax gain of approximately $1.2 billion and $1.3 billion, respectively, relating to the stores and related assets sold to Walgreens Boots Alliance.

As previously announced, Rite Aid and Albertsons entered into a definitive agreement under which Albertsons will merge with Rite Aid. The boards of directors of both companies have approved the transaction, and the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired. The merger is expected to close early in the second half of 2018, subject to the approval of Rite Aid’s shareholders, regulatory approvals, and other customary closing conditions.