Why Rite Aid (RAD) Shares Are Plummeting Today

Rite Aid Corp RAD reported a second-quarter FY23 sales decline of 3.5% year-on-year to $5.90 billion, beating the consensus of $5.77 billion.
RAD attributed the top-line decline to a reduction in revenue from COVID vaccines and testing, store closures, and a planned loss of covered lives at Elixir.
Segment Revenue: Retail Pharmacy declined 1.1% to $4.2 billion and Pharmacy Services fell 9% to $1.7 billion.
Selling, general and administrative expenses fell 5.8% to $1.2 billion.
Net loss for the quarter widened to $(331.3) million.
The company held $46.8 million in cash and equivalents as of August 27, 2022.
Adjusted EBITDA of $78.5 million decreased 26.1% Y/Y.
Adjusted EPS loss of $(0.63) missed the analyst consensus of $(0.55).
CEO Heyward Donigan said, "As we look to the second half of the year, we expect continued pressure on consumer spending and supply chain challenges."
Outlook: Rite Aid maintains its outlook for FY23 revenues and lowers its outlook for net loss and Adjusted EBITDA.
It sees total revenues of $23.6 billion - $24.0 billion against the consensus of $23.36 billion.
Rite Aid sees FY23 adjusted EPS loss $(1.52) - $(0.97) versus the estimate of $(1.39). RAD previosuly expected adjusted loss per share of $(1.19) - $(0.66).
The company lowered FY23 adjusted EBITDA outlook to $450 million - $490 million from the previously expected $460 million - $500 million.
Price Action: RAD shares are trading lower by 29.2% at $4.97 on the last check Thursday.
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Rite Aid Shares Plunge On Q2 Bottom-Line Miss, Warning On Consumer Spending & Supply Chain Challenges