Rite Aid said its retail pharmacy segment sales were pressured in the second quarter, resulting in a decline in net income and a slip in comparable store sales.
For the second fiscal quarter ended August 27, Rite Aid Corp. posted net income of $14.8 million, or one cent per diluted share, versus $21.5 million, or two cents per diluted share, in the period a year earlier. Adjusted net income was $35.5 million, or three cents per diluted share, versus $58.7 million, or six cents per diluted share, in the year-prior quarter.
Weakness in retail pharmacy segment sales hit results, according to Rite Aid. However, adjusted diluted earnings per share matched a MarketBeat published analyst average estimate.
Comparable store sales slipped 2.5% in the quarter versus the year-previous period, with pharmacy comps down 3.6% and front-end comps, which include results from general merchandise such as home-related merchandise, up 0.1%. Revenues came in at $8.03 billion for the quarter, up from $7.66 billion in the prior-year period.
“In the second quarter, we continued to drive positive results in our pharmacy services segment, which includes our EnvisionRx PBM, and had strong performance in our front-end business,” said John Standley, Rite Aid chairman and CEO. “We also saw improvements in prescription drug costs, but these improvements were more than offset by the challenging reimbursement rate environment, which we expect to continue through the remainder of the fiscal year. Heading forward, we will remain focused on operating our business as efficiently as possible while pursuing key growth opportunities such as our flu immunization campaign and converting additional stores to the wellness format, which continue to perform well and now represent nearly half of our chain.”
Rite Aid said it still anticipates that its acquisition by Walgreens Boots Alliance will close in the second half of the year, which is subject to approval under applicable antitrust laws and other customary closing conditions. Walgreens recently stated that the retailers might have to divest more stores than previously indicated to gain FTC approval for the pending acquisition.
Rite Aid operates 4,550 stores in 31 states.
