Rite Aid Posts Q4 Loss; Extended Merger Duration Negatively Impacting Results

(RTTNews) - Rite Aid Corp. (RAD) reported a fourth-quarter net loss of $21.1 million or $0.02 per share compared to net income of $65.6 million or $0.06 per share, previous year. The company said the decline in operating results is due primarily to a decline in adjusted EBITDA, partially offset by a higher LIFO credit. Adjusted net loss was $3.2 million, or breakeven per share, for the quarter.

Fourth-quarter revenues were $8.5 billion compared to $8.3 billion in the prior year's fourth quarter, an increase of 3.3 percent. Retail Pharmacy Segment revenues were $7.1 billion and increased 4.3 percent compared to the prior year period primarily as a result of the extra week in the fourth quarter, partially offset by a decrease in same store sales. Revenues in the company's Pharmacy Services Segment were $1.5 billion and decreased 1.3 percent compared to the prior year period.

Same store sales for the quarter decreased 3.0 percent over the prior year, consisting of a 4.3 percent decrease in pharmacy sales and a 0.3 percent decrease in front-end sales.

CEO John Standley said: "The extended duration of the merger process with Walgreens Boots Alliance is having a negative impact on our results. In addition, we continue to face reimbursement rate challenges that we have been unable to offset with drug cost reductions. As we remain actively engaged in discussions with the Federal Trade Commission to gain regulatory approval for the merger, we are also taking steps to review our ongoing strategy, reduce costs and make necessary changes to our business to improve our performance going forward."