Rite Aid’s Top Line Fell for 2nd Consecutive Quarter
RAD records second sales decline during the year
As we discussed in the last part of this series, Rite Aid (RAD) reported second-quarter results on September 28, 2017. The company’s top line plunged 4.4% YoY (year-over-year) to $7.7 billion, which was the second consecutive sales decline for the company. Revenue was down 4.9% during the first quarter.
The company also missed on Wall Street’s second quarter top-line expectations by $160 million, mainly due to a decline in reimbursement rates and a lower number of prescriptions filled. Rite Aid’s top line has fallen short of Wall Street’s expectations in seven of the last eight quarters.
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“While our performance for the quarter reflects a challenging reimbursement rate environment and the effects of an extended merger and asset sale process, securing regulatory clearance for the amended asset sale agreement with Walgreens Boots Alliance (WBA) gives us a clear path forward to realize the benefits of the transaction and implement our plans to deliver improved results,” said John Standley, Rite Aid’s chair and CEO.
Read the next articles to know about the performance of the company’s Retail Pharmacy and Pharmacy Services business segments.
Top-line performances of CVS and WBA
Despite the challenging environment, Rite Aid’s competitors look strong. CVS Health (CVS) reported a 4.5% increase in total sales to $45.7 billion, outdoing the consensus expectations when it reported quarterly results in early August.
Walgreens Boots Alliance (WBA), which is expected to report results by the end of October, is looking for a 4.6% jump in total sales during the quarter. However, Walgreens has missed on top-line expectations in six of the last seven quarters.
Investors looking for exposure to WBA, Rite Aid, and CVS can consider investing in the Vanguard Consumer Staples ETF (VDC), which invests ~8% of its portfolio in the three companies.