The fourth quarter of Rite Aid (RAD) was significantly affected by a weak season of cough, cold and flu, as people wore masks and distanced themselves socially during the pandemic. Climatic conditions last month also depressed sales, according to the pharmacy chain.
Rite Aid’s shares are down 20% at the start of trading, following an update to the company’s 2021 fiscal year guidance.
Sales at the same comparable front-end store fell approximately 5.6% in the quarter ended February 27, driven by a drop of almost 37% in the categories related to cough, cold and flu.
Significant weather events in February also impacted Rite Aid’s supply chain, which affected sales. The total unforeseen impact on the quarter’s results was approximately US $ 50 million to US $ 60 million.
“During the fourth quarter, our industry was impacted by a historically mild season of cough, cold and flu, as well as COVID’s continued impacts on postponing elective procedures and related acute prescription volume and selling, general and administrative expenses,” said Heyward Donigan, president and CEO of Rite Aid, in a written statement.
Rite Aid points out that it also incurred additional SG&A expenses related to COVID-19 due to a single hero-pay bonus, cleaning costs, pandemic sick leave and other incremental operating costs.
Outlook for fiscal year 2021
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For fiscal year 2021, Rite Aid Corporation now expects revenues to be approximately $ 24.0 billion, with same-store sales expected to increase approximately 3.5 percent from fiscal 2020.
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The net loss is expected to be between $ 90 million and $ 100 million.
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Adjusted EBITDA is expected to be between US $ 425 million and US $ 435 million.
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Capital expenditures are expected to be approximately $ 315 million, which includes $ 95 million for the acquisition of Bartell Drugs.
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Liquidity is approximately US $ 1.7 billion.
“Looking ahead, we saw acute prescriptions return to positive levels in March and we are proud to be selected as one of the retail suppliers that manages COVID vaccines in most of our major states and cities, representing more than 1,800 of our stores,” he said. Donigan.
Rite Aid is due to release financial results for the fourth fiscal quarter on Thursday, April 15.
The Walgreens Boots Alliance (WBA) was negotiating about 2% less on Thursday, possibly in sympathy with Rite Aid.
Ines serves the United States stock market. Follow her on Twitter at @ines_ferre
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