RAD - Rite Aid sheds 13% as company lowers outlook after Q2 revenue slump

Rite Aid Corporation ( NYSE: RAD ) slipped ~13% pre-market Thursday after the pharmacy retailer reported a decline in Q2 FY23 revenue and slashed the full-year outlook for EBITDA, citing cautious consumer demand and supply chain issues.

Revenue for the quarter dropped ~3% YoY to $5.9B amid a decline in COVID-related revenue and store closure even as retail comparable store prescriptions and comparable store acute prescriptions, excluding COVID vaccinations, rose ~3% and ~5%, respectively.

The company’s Retail Pharmacy Segment and Pharmacy Services Segment reported a ~1% YoY and ~9% YoY decline in revenue, respectively.

While adj. EBITDA plunged ~26% YoY to $78.5M, the net loss jumped ~230% YoY to $331.3M due mainly to a $252.2M impairment charge related to the Pharmacy Services Segment.

RAD reiterated the revenue outlook for fiscal 2023 at $23.6B – $24.0B and expanded the net loss forecast to $520.3M – $477.3M due to goodwill impairment in the Pharmacy Services Segment and increased impairments for store closures.

Citing cautious consumer demand and supply chain constraints in the retail business, RAD also lowered the adj. EBITDA guidance to $450M and $490M from the previous projection of $460M – $500M.

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