The 10-second takeaway
For the quarter ended Dec. 1 (Q3), Rite Aid met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share grew. The non-GAAP profit was a surprise, as analysts had predicted a loss.
Margins increased across the board.
Rite Aid reported revenue of $6.24 billion. The six analysts polled by S&P Capital IQ looked for revenue of $6.28 billion on the same basis. GAAP reported sales were 1.2% lower than the prior-year quarter's $6.31 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.04. The three earnings estimates compiled by S&P Capital IQ forecast -$0.02 per share. GAAP EPS were $0.07 for Q3 against -$0.06 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 29.0%, 250 basis points better than the prior-year quarter. Operating margin was 3.2%, 180 basis points better than the prior-year quarter. Net margin was 1.0%, 180 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $6.42 billion. On the bottom line, the average EPS estimate is -$0.04.
Next year's average estimate for revenue is $25.35 billion. The average EPS estimate is -$0.14.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 813 members out of 975 rating the stock outperform, and 162 members rating it underperform. Among 149 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 106 give Rite Aid a green thumbs-up, and 43 give it a 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 $1.70.
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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. The Motley Fool has no positions in the stocks mentioned above. 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.