Market Overview

Rite Aid Restructuring: CEO, CFO Out Along With 400 Full-Time Jobs

Rite Aid Restructuring: CEO, CFO Out Along With 400 Full-Time Jobs

Struggling drugstore Rite Aid Corporation (NYSE: RAD) announced Tuesday afternoon an organizational restructuring and leadership change which prompted a lift in stock price.

What Happened

Rite Aid said it will take action to reduce managerial layers and consolidate roles across the company. This should result in annual cost savings of $55 million, $42 million of which will be seen by fiscal 2020. The company's action will result in the elimination of around 400 full-time jobs or more than 20 percent of corporate positions.

The company's actions will offset an expected reduction in revenue as part of its diminishing obligations with Walgreens Boots Alliance Inc (NASDAQ: WBA), related to the prior sale of stores.

In addition, John Standley will step down as CEO as soon as the board finds an appropriate successor. Several other high-level managerial changes include promoting Bryan Everett from chief operating officer of Rite Aid Stores to COO of the entire company. Chief Financial Officer Darren Karst will be replaced by Matt Schroeder.

Why It's Important

Rite Aid's multiple changes to its structure will better align the company with its present scale and sets the stage for future success, the company said. It's "imperative" to take action to reduce the cost of current operations to transform towards a more efficient and profitable company.

Rite Aid will pay a one-time restructuring charge of $38 million to achieve over the coming months its targeted cost savings.

Rite Aid's stock traded higher by 9.1 percent to 74 cents per share at time of publication.

Related Links:

Baird: What Rite Aid's Renewed Deal With Distributor McKesson Means For Both Companies

Goldman Sachs Bearish On Standalone Rite Aid

Photo credit: Mike Mozart, Flickr

Posted-In: Bryan Everett Darren Karst drug stores John Standley Matt Schroeder pharmacy benefit managersNews Management Best of Benzinga


Related Articles (RAD + WBA)

View Comments and Join the Discussion!
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Powerful Blizzard Still On Track To Hit Great Plains Wednesday

Benzinga's Top Upgrades, Downgrades For March 13, 2019