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ovenerio
Omar Venerio
Articles (1464) 

US Markets Red on Thursday

Rite Aid falls on weak financial outlook

U.S. stocks were in negative territory on Thursday on the back of the Federal Open Market Committee’s release of its March meeting minutes yesterday afternoon. The Dow Jones Industrial Average fell 0.05% to 26,143, the S&P 500 index was flat at 2,888 and the Nasdaq Composite Index dipped 0.21% to 7,947.

Shares of Rite Aid Corp. (NYSE:RAD) fell more than 10% on Thursday after the company announced fourth-quarter results. Revenue declined 0.2% from the prior-year quarter to $5.38 billion, falling $180 million short of estimates. The company reported a loss of 1 cent per share, beating analysts' expectations by 2 cents.

“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,” CEO John Standley said.

During the quarter, same-store sales in the retail pharmacy segment inched up 0.7%, impacted by a 2.1% increase in pharmacy sales and a 1.9% decrease in front-end sales. Adjusted earnings before interest, taxes, depreciation and amortization were $134.1 million, or 2.5% of revenue, lower than $154.8 million, or 2.9% of revenue, in the prior-year quarter. 

Looking ahead to fiscal 2020, the company expects sales to be between $21.5 billion and $21.9 billion, with same-store sales growth of up to 1%. The net loss is expected to be between $170 million and $220 million and the adjusted EBITDA is projected to range from $500 million and $560 million. The company is guiding for an adjusted net loss of 1 cent per share to an income of 4 cents per share.

Gainers

Losers

Global markets

The main European stock markets traded mostly higher. The U.K.'s FTSE 100 declined 0.05%, France's CAC 40 gained 0.66%, Germany's Dax rose 0.25% and Spain's IBEX 35 swelled 0.41%.

In Asia, Japan's Nikkei 225 gained 0.11%, India’s BSE Sensex rose 0.06%, Hong Kong's Hang Seng declined 0.93% and China's Shanghai Composite retreated 1.60%.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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