Rite Aid Losses Hit $241 Million As Stores Close And Covid Test And Vaccine Sales Drop

Rite Aid reported a quarterly loss of more than $241 million as the struggling drugstore chain suffers from a loss of revenue from store closures on top of the loss of COVID-19 vaccine and testing sales.

Rite Aid, which has already been closing 145 unprofitable stores for the last year or so, on Thursday reported a fiscal fourth quarter loss of $241.3 million, or $4.39 per share, for the period ended March 4, 2023. The losses were greater than some Wall Street analysts expected.

Meanwhile, the drugstore chain said revenues for the quarter were $6.09 billion compared to $6.07 billion in the year-ago period, “largely due to an extra week in the fourth quarter and increases in both comparable front-end sales and non-COVID prescriptions, partially offset by a reduction in revenue from COVID vaccines and testing, store closures and the loss of commercial clients at Elixir,” which is the pharmacy benefit management company Rite Aid owns.

Rite Aid, which has struggled in recent years to compete with larger rivals Walgreens, CVS Health and Walmart pharmacies, reported a net loss for the fiscal year ended March 4, 2023, of $749.9 million, or $13.71 per share, which compared to the previous year’s net loss of $538.5 million, or $9.96 per share. Rite Aid has more than 2,300 drugstores across 17 states

And there’s not much improvement forecast for the new fiscal year, according to Rite Aid’s fiscal 2024 guidance unveiled Thursday, which said a “net loss is expected to be between $439 million and $466 million.”

Still, Rite Aid interim chief executive Elizabeth “Busy” Burr, who replaced Heyward Donigan in January said the company was “making progress.”

“Our fourth quarter results were at the higher end of our guidance and above consensus, driven by encouraging results in retail pharmacy and year over year improvement for the quarter at Elixir,” Burr said in a statement accompanying earnings. “We are making progress in our turnaround program to drive performance acceleration that we expect will help mitigate fiscal 2024 challenges related to reimbursement, COVID headwinds and enrollment at Elixir, and to drive meaningful Adjusted EBITDA growth in fiscal 2025 and 2026.”