Rite Aid (NYSE: RAD) reported earnings on Dec. 15. Here's what you need to know.

The 10-second takeaway

  • For the quarter ended Nov. 26 (Q3), Rite Aid met on revenues and met on EPS.
  • Gross margins were steady. Operating margins expanded. Net margins improved.

Revenue
Rite Aid reported revenue of $6.3 billion. The five analysts polled by S&P Capital IQ looked for revenue of $6.3 billion. Rad

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS
Non-GAAP EPS came in at -$0.05. The two earnings estimates compiled by S&P Capital IQ predicted -$0.13 per share on the same basis. GAAP EPS were -$0.06 for Q3 compared to -$0.09 per share for the prior-year quarter. 

Rad

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margins
For the quarter, gross margin was 26.5%, about the same as the prior-year quarter. Operating margin was 1.4%, 40 basis points better than the prior-year quarter. Net margin was -0.8%, 50 basis points better than the prior-year quarter.

Rad

Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $6.9 billion. On the bottom line, the average EPS estimate is for -$0.14 (There are five revenue estimates and three EPS estimates.)

For the full year ending 2012, the average estimate for revenue is $25.8 billion. The average EPS estimate is -$0.44. (There are eight revenue estimates and six EPS estimates.)

Investor sentiment
The stock rates one stars at Motley Fool CAPS, with 808 members out of 958 rating the stock outperform, and 150 members rating it underperform. Among 130 CAPS All-Star picks, 98 give Rite Aid the green thumbs-up, and 32 give it the red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rite Aid is hold, with an average price target of $1.43.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.