A pedestrian crosses the street in front of a Rite Aid Corp. store in Los Angeles, California.
Patrick T. Fallon | Bloomberg | Getty Images
Shares of Rite Aid fluctuated wildly on Thursday following disappointing quarterly results and news on an agreement with Amazon that gave investors the hope of a turnaround.
Rite Aids stocks occurred more than 8% in premarket trading before they jumped after markets opened. They were up by about 5% in morning trading. The company announced a partnership with Amazon on Thursday, saying it would open Amazon pickup counters in 1
The company lost $ 99.3 million or $ 1.88 a share in the first quarter ending June 1. The loss was greater than what analysts expected, even after adjustment for restructuring costs and other expenses. Analysts asked by Refinitiv had expected the company to lose 8 percent per share on an adjusted basis, not the 14 cents per share it reported.
Rite Aid also missed revenue estimates, and amounted to $ 5.37 billion in the quarter, short of the $ 5.38 billion Wall Street expected. Rite Aids stock stocks exceeded 8% before premarket trading recovery. They declined by about 1% shortly before the markets opened.
Press to clear prescription drug prices weighed on Rite Aid in the quarter, a problem that has also plagued competing pharmacy chains. The insurance companies pay pharmacies less to fill prescriptions, eat away at the pharmacy's profits.
Rite Aids executives said the company is already taking steps to improve its performance for the year and plans to design new payment models, such as being paid to prove it can make patients healthier, so it doesn't have to rely on the traditional system which is clearly under pressure.
"These efforts help us identify significant opportunities for further growth and operational efficiency," said John Standley, director of Rite Aid, to analysts at a conference call. "While we are still in the process, we expect these measures to Drive significant value in fiscal 2021 and beyond while reducing dependence on traditional pharmaceutical reimbursement models. "
Rite Aid is trying to find its way forward after two failed attempts to sell itself over the past few years, selling nearly 2,000 locations to Walgreens Rite Aid now operates 2,466 stores, making it a much smaller player than Walgreens and CVS Health, each of which owns about 10,000 drugstores.
Rite Aid gave investors a year round broad forecast, and estimate a loss of as much as 14 cents per share to a profit of as much as 72 cents per share. re a loss of 1 cent in revenue of 4 cents per share. The company completed a reverse share split earlier this year in a ratio of 1 to 20 to increase the share price and keep the shares from being delisted on the New York Stock Exchange.
Rite Aid repeated its full-year sales forecast of $ 21.5 billion to $ 21.9 billion and similar sales to increase up to 1%.