Rite Aid stock jumps after surprise adjusted profit, store closures announced

MW Rite Aid stock jumps after surprise adjusted profit, store closures announced

Rite Aid Corp. $(RAD)$ shares rose 2.4% in Tuesday premarket trading after the pharmacy retailer reported a surprise third-quarter adjusted profit and announced dozens of store closures. Net loss totaled $36.1 million, or 67 cents per share, after net income of $4.3 million, or 8 cents per share, last year. Adjusted EPS of 15 cents beat the FactSet consensus for a loss of 18 cents. Revenue of $6.229 billion was up from $6.117 billion but below the FactSet consensus for $6.320 billion. "Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services," said Heyward Donigan, Rite Aid's chief executive, in a statement. Rite Aid announced a store review that will result in 63 store closures and an annual EBITDA benefit of $25 million. Store closures began in November. The company will continue to review stores and expects additional closures over the next several months. For fiscal 2022, Rite Aid is guiding for revenue between $24.4 billion and $24.7 billion and an adjusted loss per share between 4 cents and 49 cents. The FactSet consensus is for revenue of $25 billion and loss per share of 77 cents. Rite Aid shares have slumped 21.7% in 2021 while the S&P 500 index has gained 21.6% for the period.