Why Rite Aid Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of drugstore chain Rite Aid (NYS: RAD) climbed as high as 11% on Thursday after its quarterly results and full-year guidance topped Wall Street expectations.
So what: Rite Aid shares have been crushed over the past few months on huge debt concerns, but a lower first-quarter loss -- $0.03 versus a loss of $0.07 in the year-ago period -- coupled with a slightly improved full-year outlook eases some of those worries. Management even delivered its sixth straight quarter of same-store growth, suggesting that its turnaround efforts are indeed gaining some traction.
Now what: Looking forward, management now sees a full-year loss of $0.13 to $0.29, slightly better than its prior view calling for a loss of $0.13 to $0.31. "We're proud of the hard work and dedication that our entire Rite Aid team has displayed in driving these positive results and look forward to delivering an even better shopping experience to our customers as we move ahead," Chairman and CEO John Standley said. Given Rite Aid's still-precarious financial and competitive position, however, average investors would probably do well to maintain their distance.
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The article Why Rite Aid Shares Popped originally appeared on Fool.com.Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.