Rite Aid posts Q4, full-year loss amid immunization, script growth
Despite delivering a record number of immunizations, continued same-store pharmacy sales and script count increases and solid growth within its EnvisionRxOptions segment, Rite Aid swung to a loss for its fourth quarter and fiscal year 2019. For the quarter, net loss was $255.6 million, with net loss for the full-year period totaling $667 million.
“In the fourth quarter, we continued generating critical momentum in key areas of our business while taking important steps to position Rite Aid for future growth” said Rite Aid CEO John Standley. “Despite a mild flu season, we delivered our third consecutive quarter of same-store pharmacy sales and prescription count growth thanks to a record number of immunizations and other script growth initiatives.”
Standley noted that as the company embarks on a new fiscal year, the company is looking to build momentum and savings. In addition to previously announced savings from a restructuring leadership, Standley said the company will focus on patient outcomes and evolving its front-end business in the coming fiscal year.
Among changes coming to the front end that COO Bryan Everett outlined on the company’s earnings call is the sale of CBD creams, lotions and lip balms in Oregon and Washington, as well as the relaunch of its own-brand Rite Aid Pharmacy line. The company also will be removing e-cigarettes and vaping products from its stores nationwide, with Everett citing increased use of e-cigarettes among teens as a driving factor in the decision and reiterating Rite Aid’s policy of IDing every customer for age-restricted sales.
As we begin our new fiscal year, we’ll look to build on this momentum as we continue transforming our business to better align with our new operational footprint and deliver greater value in the emerging value-based care marketplace,” Standley said. “These efforts will include a strong focus on driving positive patient health outcomes, evolving our front-end business, expanding our omni-channel capabilities and controlling costs to become a more efficient and profitable company.”
With regard to the company’s earnings, fourth-quarter net loss was $255.6 million, or 24 cents per share — an improvement over the $483.7 million loss the company posted in its 2018 fourth quarter. Rite Aid said the improvement was largely due to a charge of $191 million in the prior-year period. Income tax expense this year was $197 million, compared with $325 million in the prior-year period.
Revenues were $5.38 billion, up slightly over the prior-year period. The company’s retail pharmacy segment revenues were flat at $3.97 billion. Same-store sales rose 0.7%, driving a 2.1% increase in pharmacy sales and a 1.9% decrease in front-end sales. Rite Aid said generic introductions drove a 100-basis-point decrease in pharmacy sales, even as adjusted same-store prescription fills rose 0.8%. Pharmacy services segment revenues were $1.46 billion, up 1.2% from the prior-year period, which the company attributed to increased Medicare Part D membership.
For the full year 2019, Rite Aid posted revenues of $21.6 billion, increasing 0.5% over its fiscal 2018. Net loss for the year was $667 million — an increase over the previous period’s $349.5 million net loss. The company attributed the increase in net loss to increased goodwill and intangible asset charges, increased lease termination and impairment charges, increased LIFO expense and a prior-year gain from the merger termination fee received from Walgreens Boots Alliance.
Rite Aid’s retail pharmacy segment saw same-store sales increase 0.6%, comprising a 1.7% increase in pharmacy sales and a 1.4% decrease in front-end sales. Generic introductions had a 112-basis-point impact on pharmacy sales as adjusted prescriptions filled rose 0.7% over the prior year. Pharmacy services segment revenue was $6.1 billion — a 3.3% increase over the prior year that the company attributed to increased Medicare Part D membership.
Rite Aid’s earnings report came the day after its board of directors voted to initiate a 1-to-20 reverse stock split ratio, which will reduce the number of issued and outstanding common stock to 54 million from 1.08 billion. The move — aimed at increasing the company’s share price to maintain compliance with New York Stock Exchange share price guidelines to avoid delisting. The company said its common stock will begin trading on the split-adjusted basis on April 22.
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