Rite Aid may have to wait until 2026 before the company sees positive financial numbers on a more consistent basis. That was the tone of the company’s first quarter earnings call Thursday, as interim CEO Elizabeth Burr tried to offset a poor showing with progress on turnaround initiatives.
“We continue to believe we are on track to achieve Adjusted EBITDA growth in fiscal years 2025 and 2026,” she said. “Our first quarter results were driven by strong script growth, solid pharmacy margins and early progress with our turnaround program, which offset underperformance on front-end sales in the retail pharmacy segment and a higher-than-expected medical loss ratio at Elixir Insurance.
“To help mitigate this, we are making targeted reductions to SG&A and capital expenditures over the remainder of the year,” Burr added.
In the meantime, Rite Aid continues to try to weather a poor earnings climate. For Q1, the company reported a net loss of $306.7 million (vs. $110.2 million in losses in Q1 2022), adjusted net loss of $40.1 million and Adjusted EBITDA of $91.7 million.
Revenues came in at $5.65 billion, which was about $350 million less year-over-year. Rite Aid blames the results on the reduction in the company’s Prescription Drug Plan membership and the loss of commercial clients at pharmacy services provider Elixir.
However, Rite Aid’s Retail Pharmacy Segments was a bright spot.
Retail pharmacy revenues saw an increase of 3.4% year-over-year behind an increase in both acute and maintenance prescriptions. Same store sales increased 8.4% vs. Q1 2022, and the number of prescriptions filled in same stores, adjusted for 30-day equivalents, were up 4.7%. Total same store prescriptions, excluding COVID immunizations and tests, increased 7.4% year-over-year. Same store maintenance prescriptions and same store acute prescriptions were up 7.6% and 6.8%, respectively, when compared to Q1 2022.
Pharmacy services revenues were 30.7% less than they were in Q1 2022, mainly due to the decrease in Elixir Individual Part D insurance membership.
For fiscal year 2024, Rite Aid is cutting back on total company Adjusted EBITA guidance by $10 million, putting it in the $330 million to $360 million range. Total revenue projection now sits at $22.6 billion to $23 billion, and net loss is expected to be somewhere in the range of $650-680 million.