Rite Aid shares rocket higher after big profit and 3Q beat
Rite Aid shares steamed toward their biggest one-day percentage gain in more than three decades Thursday after the struggling drugstore chain reported a rare profit and easily topped analyst expectations.
Shares advanced over 45 percent after the company said it booked $51.5 million in net income in its fiscal third quarter, compared to a $4.5 million loss last year. The change was due mainly to a big gain from some debt retirement.
Earnings, adjusted for one-time gains and costs, came to 54 cents per share, far surpassing the 7 cents Wall Street had expected, according to a survey by FactSet.
Revenue edged up slightly to $5.46 billion, also beating analyst projections for $5.42 billion in the quarter that ended Nov. 30.
Rite Aid runs more than 2,400 drugstores in 18 states. The company has struggled, like larger rivals CVS and Walgreens, with reimbursement cuts and thinner profits from some drugs, among other problems.
While there was a huge percentage gain in the company’s shares, the stock is not what it once was. Shares can be had for a third of what they would have cost in the summer of 2018.
The company’s shares slipped below $1 about a year ago, which forced the company to chop its share count by about 95% last spring. That pushed the price of the remaining shares above minimum trading requirements on the New York Stock Exchange.
Rite Aid jettisoned long-time CEO John Standley and several other top executives earlier this year. In August, it named former insurance executive Heyward Donigan CEO.
The company said Thursday that it now expects fiscal 2020 adjusted earnings of between 13 cents and 55 cents per share. That’s a narrower range compared to a forecast it made in September for between 0 and 56 cents per share.
Shares of Rite Aid Corp., based in Camp Hill, Pennsylvania, rose $3.91 to $12.23 while broader indexes advanced slightly.