Drugstore chain Rite Aid Corp. (RAD, Financial) reported its second-quarter 2018 results before the opening bell on Sept. 28.
The Pennsylvania-based company posted a loss of 1 cent per share, which was in line with estimates. Quarterly revenue of $7.7 billion was just shy of expectations of $7.8 billion and declined 4.4% from the prior-year quarter.
Following the announcement, shares slid nearly 11% to open at $2.07.
The trend in the company’s revenue growth over the past decade is illustrated in the graph below.
Same-store sales declined 3.4%, falling for the fifth consecutive quarter.
Net income for the quarter, however, increased to $170.7 million, or 16 cents per share, from $14.8 million, or 1 cent per share, in the year-ago quarter due to a $325 million merger termination fee received from Walgreens Boots Alliance Inc. (WBA, Financial).
Walgreens pursued buying Rite Aid for nearly two years before calling off the deal in June after failing to overcome antitrust concerns from the Federal Trade Commission. Instead, Walgreens is now buying 1,932 stores from Rite Aid for $4.38 billion. The FTC approved the transaction last week.
In a statement, Rite Aid Chairman and CEO John Standley said the approval of the new deal “gives us a clear path forward to realize the benefits of the transaction and implement our plans to deliver improved results.”
"As we work to complete the asset sale, which will reduce our leverage and provide greater financial flexibility to invest in our business, we'll also focus on generating momentum for our business by meeting the health and wellness needs of our customers and patients while delivering an outstanding experience in our stores," he added.
Rite Aid also announced Kermit Crawford is joining the company as president and chief operating officer.
With 1.59% of outstanding shares, David Einhorn (Trades, Portfolio) has the largest holding of Rite Aid among the gurus. Paul Singer (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) also have positions in the stock.
Disclosure: I do not own any stocks mentioned.
