Rite Aid Corporation reported operating results for its third fiscal quarter ended November 26, 2016.
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For the third quarter, the company reported revenues of $8.1 billion, net income of $15 million, or $0.01 per diluted share.
Adjusted net income was $23.3 million, or $0.02 per diluted share and Adjusted EBITDA was $274.1 million, or 3.4 percent of revenues.
Revenues for the quarter were $8.1 billion compared to revenues of $8.2 billion in the prior year's third quarter, a decrease of $64.5 million or 0.8 percent.
Retail Pharmacy Segment revenues were $6.5 billion and decreased 3.1 percent compared to the prior year period primarily as a result of a decrease in same store sales.
Revenues in the company's Pharmacy Services Segment were $1.6 billion and increased 9.7 percent compared to the prior year period.
Same store sales for the quarter decreased 3.4 percent over the prior year, consisting of a 4.7 percent decrease in pharmacy sales and a 0.4 percent decrease in front-end sales.
Pharmacy sales included an approximate 182 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores decreased 2.4 percent over the prior year period.
Prescription sales accounted for 68.9 percent of total drugstore sales, and third party prescription revenue was 98.2 percent of pharmacy sales.
Net income was $15.0 million or $0.01 per diluted share compared to last year's third quarter net income of $59.5 million or $0.06 per diluted share.
The decline in operating results is due primarily to a decline in Adjusted EBITDA, partially offset by lower income tax expense.
Adjusted EBITDA (which is reconciled to net income on the attached table) was $274.1 million or 3.4 percent of revenues for the third quarter compared to $373.2 million or 4.6 percent of revenues for the same period last year.
The decline in Adjusted EBITDA is due to a decrease of $117.5 million in the Retail Pharmacy Segment, resulting from lower pharmacy gross profit, partially offset by an increase in front end gross profit. Pharmacy gross profit decreased because of lower reimbursement rates and script count.
The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $18.5 million of Pharmacy Services Segment Adjusted EBITDA. This was due to an increase in revenues and strong operating results in the current year.
In the third quarter, the company opened 3 stores, relocated 9 stores, and remodeled 95 stores, bringing the total number of wellness stores chainwide to 2,322.
The company also acquired 1 store and closed 7 stores, resulting in a total store count of 4,547 at the end of the third quarter. The company also opened 2 clinics in the third quarter, bringing the total to 92. ■