Rite Aid Loss Hits $67 Million As Covid Shots And Testing Decline

Rite Aid reported a quarterly loss of more than $67 million due in part to “a reduction in COVID vaccine and testing revenue,” the drugstore chain said Wednesday.

Rite Aid lost $67.1 million for its fiscal 2023 third quarter ended Nov. 26 of this year compared to a loss of $36 million in the year-ago quarter, the company disclosed. For the first nine months of the year, Rite Aid has lost more than $500 million with revenue largely flat or falling amid store closures.

Rite Aid also narrowed its financial outlook for fiscal 2023 revenues and lowered its outlook for net loss. “Net loss is expected to be between $584 million and $551 million,” Rite Aid disclosed Wednesday. In September, Rite Aid said its fiscal 2023 net loss was “expected to be between $520.3 million and $477.3 million.”

In its fiscal third quarter, Rite Aid said revenue dropped to $6.1 billion, compared to $6.2 billion in the year-ago period. Part of the reason for the revenue decline was fewer Americans are coming into stores for diagnostic tests for Covid-19 or vaccines to protect against the virus as they were earlier in the pandemic.

Drugstore chains have done well during the Covid-19 pandemic thanks in part to their addition of healthcare services and they have become the go-to place to get vaccinated and tested for Covid-19. These days, however, testing is slowing and fewer Americans are returning for booster shots despite their benefits.

In a statement accompanying Wednesday’s earnings report, Rite Aid chief executive Heyward Donigan said the company was pleased with results from its pharmacy benefit management unit, Elixir, and “our accelerated sales growth at retail.”

“However, based on recent trends, we are lowering our full year guidance due to headwinds including pharmacy margin, seasonal markdowns and higher shrink,” Donigan said. “In addition, we are kicking off a performance acceleration program, which allows us to fast-track initiatives that will improve sales, script volume and operating margins, and free up cash.”