Rite Aid’s Q1 Results Beat Consensus Estimates, Guidance Disappoints; Shares Dip 14.5%


Shares of retail drug store Rite Aid Corporation (RAD) declined 14.5% on Thursday following the release of its first-quarter Fiscal 2022 (ended May 29) results.

Quarterly adjusted earnings came in at $0.38 per share, beating analysts’ expectations of $0.22 per share. Also, it compared favorably with an adjusted net loss of $0.04 per share reported in the last year’s quarter.

The company reported revenues from continuing operations of $6.16 billion, which surpassed consensus estimates of $6.13 billion and was up 2.2% from the year-ago period. (See Rite Aid stock chart on TipRanks)

President and CEO at Rite Aid, Heyward Donigan said, “With a healthier economy and the reopening of the communities we serve, combined with the execution of our RxEvolution strategy, we are well positioned to deliver on our strategic priorities.”

For Fiscal 2022, the company expects to deliver total revenues in the range of $25.1 billion to $25.5 billion. However, adjusted net loss per share is expected to be between $0.79 and $0.24, versus the consensus estimate of $0.80 earnings per share. Rite Aid seeks to incur about $300 million in capital expenditures during the Fiscal Year.

Following the results, Deutsche Bank analyst George Hill reiterated a Hold rating on the stock but lowered the price target to $13 from $18. The new price target implies 26% downside potential from current levels. Hill believes that declining COVID vaccine volumes is a headwind.

Shares have gained 7.2% over the past year.

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