What happened

Shares of drugstores and grocery stores enjoyed a bit of a rebound in Monday trading -- with one stock in particular bouncing higher than the others.

As of 2:10 p.m. EDT, shares of Sprouts Farmers Market (NASDAQ:SFM) are up 10.8%, Walgreens Boots Alliance (NASDAQ:WBA) is up 3%, and Rite Aid (NYSE:RAD) -- yes, Rite Aid of all companies -- is up most of all: 18.5%!

Rite Aid storefront.

Image source: Rite Aid.

So what

And yet maybe we shouldn't be entirely surprised. On Friday, President Trump made a big splash by promising to partner with retailers and pharmacies to turn their stores and parking lots into centers for drive-through testing for COVID-19. That seems like a move designed to boost foot traffic at these locations -- as if the widespread news reports of shoppers mobbing retail locations in search of hand sanitizer and toilet paper over the weekend didn't make it obvious that foot traffic was already going up.

Today, we got clear evidence of how good the news could get when Rite Aid held an analyst day and surprised investors with predictions that it would do $21.9 billion or more in fiscal 2020 revenue (analysts had expected less than $21.7 billion) and then grow that to $22.5 billion to $22.9 billion in fiscal 2021. (Wall Street didn't expect the company to make even $21.9 billion until next year.)

Now what

Perhaps most shocking, Rite Aid management didn't even cite the president's COVID-19 testing plan as the primary driver behind its improvement, with CEO Heyward Donigan instead attributing the improved revenue outlook to "changes to our management team, reduced ... leverage [and] an acute focus on execution and innovation [including] a relentless focus on customer experience and design [and] prescription and clinical services growth."

Rite Aid management even promised investors would see improved free cash flow -- albeit not until 2023, but when you consider that Rite Aid hasn't had any free cash flow to report, improved or otherwise, since early 2018, even that promise was probably more than anyone expected.

Now if only Walgreens and Sprouts could announce something similar, maybe we could actually keep this rally rolling.