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Why Rite Aid Stock Is Plunging Today

By Keith Speights - Jun 24, 2021 at 12:03PM

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Investors don't like the company's first-quarter update.

What happened

Shares of Rite Aid (RAD 12.08%) were plunging 14.3% lower as of 11:22 a.m. EDT on Thursday. The steep decline came after the pharmacy retailer reported its fiscal 2022 first-quarter results before the market opened.

So what

As you might expect after today's sell-off of the healthcare stock, investors weren't happy with Rite Aid's first-quarter results. The company reported revenue of $6.16 billion, below the consensus estimate of $6.21 billion. However, Rite Aid's adjusted earnings of $0.38 per share easily beat the average analysts' estimate of $0.22 per share.

Pharmacist wearing a face mask with medications on shelves in the background.

Image source: Getty Images.

Probably the biggest disappointment came from Rite Aid's full-year guidance. The company expects an adjusted net loss per share of between $0.79 and $0.24. The consensus Wall Street estimate is for the company to post full-year adjusted earnings of $0.80 per share.

Now what

It's more important to focus on a company's long-term prospects than how it performs in a single quarter. Rite Aid CEO Heyward Donigan said she thinks the pharmacy retailer is on the right track going forward, saying, Rite Aid is in a position to benefit from "a healthier economy and the reopening of the communities we serve."

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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