Rite Aid Lowers FY16 Profit Forecast, Shares Drop

Shares of

fell more than 5 percent in pre-market trading after the company reported results for its fiscal first quarter and lowered its profit forecast for the full year. The Camp Hill, Pennsylvania-based company posted quarterly earnings of $18.8 million, or $0.02 per share, compared to $41.4 million, or $0.04 per share, in the year-ago quarter. The recent quarter earnings were lowered by $0.02 per share due to EnvisionRx acquisition-related expenses. Its revenue climbed to $6.65 billion from $6.47 billion. However, analysts were expecting earnings of $0.03 per share on revenue of $6.65 billion. The average estimate among 28 Estimize users was for earnings of $0.07 per share and revenue of $6.7 billion. Its same-store sales increased 2.9 percent for the quarter. Front-end sales rose 0.6 percent, while pharmacy sales climbed 3.9 percent. The number of prescriptions filled in same stores rose 1.6 percent in the quarter. Adjusted EBITDA climbed to $299.3 million from $282.6 million. "Our first-quarter results reflect the continued progress we're making in positioning Rite Aid for growth, including increases in same-store sales, same-store prescription count and Adjusted EBITDA," said Rite Aid Chairman and CEO John Standley. "We generated these positive results while also making significant strategic investments to continue our transformation into a retail healthcare company." For the full year, Rite Aid now expects earnings of $0.14 to $0.22 per share, versus earlier outlook of $0.19 to $0.27 per share. The company now projects revenue of $30.7 billion and $31.2 billion. It also projects full-year adjusted EBITDA of $1.350 billion to $1.450 billion and same store sales growth of 2.50 percent to 4.50 percent. Rite Aid shares fell 5.49 percent to $8.43 in pre-market trading.