What To Expect From Rite Aid’s Q3 Earnings

by Trefis Team
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Rite Aid (NYSE: RAD) will report its Q3 2016 earnings on December 22nd before the markets open. The second quarter wasn’t a particularly strong one for the company, with its revenues of $8.03 billion missing the Reuters’ compiled consensus estimates of $8.17 billion, primarily due to lower same store sales. The company’s net income declined 40% over the same period last year to $35.5 million, or 6 cents a share, but beat the Reuters’ compiled consensus estimates of 2 cents a share. Owing to the pending regulatory approval of its merger with Walgreens, the company did not release any guidance figures for the third quarter or the full fiscal year. As of the end of the second quarter, Rite Aid operates in 90 clinics, 2,214 wellness stores and has a total store count of 4,550 in the U.S.

Screen Shot 2016-12-20 at 15.24.50

In the third quarter, Rite Aid, the third largest pharmacy retail chain in the U.S., is expected to show a moderate single digit increase in revenues. The revenue from prescription drugs and front end sales is expected to drive the growth, primarily due to the aging U.S. population and higher front end store sales through the holiday season. The company acquired EnvisionRx in August 2015, which marked its entry into the PBM market. With the PBM market expected to grow at a CAGR of over 7% through 2019, [1] we expect the division’s revenues to grow year-over-year and should increase its share in the company’s overall revenues.

Owing to the pending regulatory approval of its merger with Walgreens, the company is not expected to hold an earnings call following the release of its quarterly results.


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Notes:
  1. PBM U.S. Market, Rxresource, December 17 2015 []
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