Rite Aid Revenue Tops Wall Street's Expectations Despite Sharp Profit Decline
Rite Aid reported its fiscal 2015 first-quarter earnings before the market opened today. The drugstore chain delivered earnings that were in line with analysts' forecasts and revenue that beat Wall Street's expectations.
For the period ended May 31, Rite Aid reported a profit of $0.04 per diluted share. While this met the Street's profit estimate for the quarter, it marked a 55% decline from the same period a year ago in which Rite Aid generated earnings per share of $0.09.
The company said lower reimbursement rates, as well as higher salary and payroll expenses caused its quarterly profit decline. Nevertheless, Rite Aid's first-quarter revenue increased 3% to $6.5 billion, up from $6.3 billion in the first quarter of fiscal 2014. For comparison, Wall Street was looking for revenue of $6.43 billion. Same-store sales climbed 3.1% in the quarter, while pharmacy same-store sales increased 4.6%. Rite Aid said the number of prescriptions filled in stores open at least a year climbed 2.3% from a year ago. Prescription sales made up 68.4% of total drugstore sales.
Rite Aid's chief executive, John Standley,said in the company press release: "As we work through managing the higher-than-expected drug costs and reimbursement rate pressure that affected our financial results for the quarter, we remain focused on executing our strategy to expand our health care offering and transform Rite Aid into a growing retail health care company."
The company maintained its fiscal 2015 forecast for earnings between $0.30 and $0.40 per share. Revenue is still anticipated in a range of $26 billion to $26.5 billion.
Shares of Rite Aid were up nearly 4% in early trading as of 9:00 a.m.
-- Material from The Associated Press was used in this report.
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