Rite Aid Posts Acquisition-Driven, Double-Digit Revenue Increase
April 07 2016 - 8:42AM
Dow Jones News
By Austen Hufford
Rite Aid Corp. said despite a same-store sales decline, its
fourth-quarter revenue rose 21% on its acquisition of a
pharmacy-benefit manager.
The third-largest drugstore chain agreed to merge into No. 1
Walgreens Boots Alliance Inc. in a $17.2 billion agreement struck
in late October. Accordingly, Rite Aid said it wouldn't provide
guidance for its just started fiscal year. The company said it
expects the deal, which is undergoing antitrust scrutiny, to close
in the second half of the year.
In February 2015, Rite Aid agreed to buy pharmacy-benefit
manager Envision Pharmaceutical Services for about $2 billion from
investment firm TPG. Revenue from that segment now accounts for 18%
of total revenue, and revenue in its retail pharmacy segment
declined in the quarter from a year before.
The chain, like its rivals, has adjusted its offerings to
broaden its business model as the pharmacy and drugstore industry
expands into the health and wellness sector. Rite Aid has worked to
expand its RediClinics and remodeled 89 wellness stores, which
offer organic food and natural personal-care options and feature
consultation rooms for discussions with pharmacists. It added three
new clinics.
Same-store sales decreased 0.6% from last year, with a 0.8%
decrease pharmacy sales and a 0.4% decrease in front-end sales.
Pharmacy sales were dented by new generic introductions, but the
number of prescriptions filled increased 0.1%.
Rite Aid reported a profit of $65.6 million, or 6 cents a share,
down from $1.84 billion, or $1.79 cents a share, a year prior. The
previous year's profit benefited from a $1.68 billion income-tax
benefit. Excluding that and other items, adjusted earnings per
share rose to 7 cents from 6 cents a year prior.
Revenue jumped 21% to $8.27 billion, but its retail pharmacy
segment saw a 0.3% decline to $6.83 billion.
Analysts polled by Thomson Reuters had forecast earnings of 6
cents on $8.4 billion in revenue.
Shares, which have risen 4.1% over the last three months,
increased 0.4% in light premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 07, 2016 08:27 ET (12:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Rite Aid (NYSE:RAD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rite Aid (NYSE:RAD)
Historical Stock Chart
From Sep 2023 to Sep 2024