What happened

Shares of drugstore company Rite Aid (RAD -62.50%) jumped 16.3% on Tuesday. The stock closed on Monday at $4.11. It opened on Tuesday at the same price before shooting to a high of $5.09 shortly after noon. It fell a little at the close to $4.74. The stock has a 52-week low of $3.84 and a 52-week high of $15.65 and is down more than 67% so far this year.

So what

Despite Rite Aid's current woes, investors jumped in to buy its stock the same day that President Joe Biden got his COVID-19 booster shot and encouraged Americans to do the same. This is considered good news for drugstore stocks in general as it will likely increase foot traffic at stores. Rite Aid may be seen as a bargain with a potential to turn things around, though even the company has said it doesn't expect to be cash-flow positive until next year.

In the second quarter of its 2023 fiscal year, Rite Aid had declines in nearly every category. Revenue was reported as $5.9 billion, down 3%, year over year, while the company reported a net loss of $331 million, or an earnings per share (EPS) loss of $6.07 compared to a net loss of $100 million and an EPS loss of $1.86 in the same period last year. It is the seventh consecutive quarter that Rite Aid has lost money.

Rite Aid's guidance estimates a net loss this year between $477.3 million and $520.3 million, which would be a slight improvement over the $538 million it lost in fiscal 2022.

Now what

Investors will want to see real progress toward profitability for the healthcare company in the third quarter. Rite Aid has fallen behind its two larger competitors in CVS Health and Walgreen's Boots Alliance. A key for Rite Aid will be how quickly it can pay down its debt while expanding its digital footprint with customers. It trimmed $40 million of debt in the second quarter, but still has $3.2 billion in total debt.