What happened
Shares of Rite Aid (RAD 20.00%) were sinking 8% as of 11:06 a.m. EDT on Thursday. The decline came after the pharmacy chain announced its second-quarter earnings results before the market opened.
So what
Revenue from continuing operations in the second quarter was $6.11 billion, up 2.2% year over year. This fell short of the Wall Street consensus estimate of $6.21 billion.
The company announced an adjusted net loss from continuing operations in the second quarter of $22 million, or $0.41 per share. This reflected significant deterioration from Rite Aid's adjusted net income of $13.5 million, or $0.25 per share, in the prior-year period. However, the adjusted net loss came in better than the average analysts' estimate of a net loss of $0.48 per share.
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Investors shouldn't place too much focus on a single quarter. Rite Aid's second-quarter results provide only a snapshot of how the company is doing. In this case, though, those results reflect both the progress it is making and the challenges that it continues to face.
Rite Aid's retail pharmacy business continues to perform relatively well. Sales increased 6.5% year over year to $4.28 billion. But the company's pharmacy services segment is struggling. Revenue fell 6.9% to $1.9 billion with declining membership in the pharmacy benefits management business and Elixir insurance.
Now what
Rite Aid thinks that it could receive a boost from increased demand for COVID vaccines and testing through the end of the year. The company increased its full-year guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of $460 million to $500 million.
