RAD records third consecutive quarter of sales decline in 3Q17
Rite Aid (RAD) reported its 3Q17 results after the market closed on January 3. The company’s top line plunged 5.6% YoY (year-over-year) to $5.35 billion (excluding discontinued operations). After including revenue from discontinued operations, total sales stood at $7.74 billion, down 4.3% YoY.
This was the third consecutive quarter of sales decline for the company. Revenue was down 4.9% and 4.4% during the first and second quarters, respectively. See the next part of this series to learn about the performance of the company’s key businesses in 3Q17.
Walgreens released its quarterly results a day after Rite Aid. The company recorded a 5.3% YoY increase in total revenue to $30.15 billion. It outperformed Wall Street expectations by $220 million.
WBA store transfer on track
Rite Aid started the process of transferring stores and related assets to Walgreens Boots Alliance (WBA) during the quarter. RAD agreed to sell 1,932 stores and three distribution centers in a $4.37 billion deal to Walgreens in September last year. The company has successfully transferred 357 stores to Walgreens for net proceeds of about $715 million.
“To date, we have transferred 357 stores and have received approximately $715 million in proceeds, which we have used to pay down debt. Looking forward, in addition to completing the transfer process, we will continue to focus on our most significant business-building opportunities as we work together to deliver a great experience to our customers and patients,” said Rite Aid’s Chairman and CEO, John Standley.
Once after the transition completes, the new Rite Aid should have 2,569 stores located primarily in eight states.
Investors looking for exposure to Walgreens Boots Alliance and Rite Aid can consider the Vanguard Consumer Staples ETF (VDC), which invests 3.33% of its portfolio in the two companies.