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CAMP HILL, Pa. – Rite Aid Corporation announced that it is updating its fiscal 2019 outlook, which the company initially provided on April 12, 2018 and included expectations for sales, same store sales, Adjusted EBITDA, net loss, Adjusted net income per share, and capital expenditures. As previously disclosed, Rite Aid’s outlook is based on a number of factors, including, but not limited to, the benefits from an anticipated reimbursement rate environment that is more stable than the prior year, fees under the Transition Services Agreement (the “TSA”) with Walgreens Boots Alliance, Inc. (“WBA”), generic drug purchasing efficiencies, and other initiatives to grow sales and drive operational efficiencies. Rite Aid’s fiscal 2019 outlook does not reflect the impact of the proposed merger with Albertsons Cos.
Based upon recent generic drug bid activity and on anticipated generic drug market conditions for the balance of the year, generic drug purchasing efficiencies are expected to be significantly below Rite Aid’s previous experience and will not meet the company’s expectations for the year. The company now expects generic drug purchasing efficiencies to be approximately $80 million less than when Rite Aid established its fiscal 2019 outlook. As a result, Rite Aid is updating its outlook for Adjusted EBITDA, net loss and Adjusted net loss per diluted share as follows:
– Adjusted EBITDA is now expected to be in a range between $540 million and $590 million, updated from the previously disclosed range of between $615 million and $675 million;
– Net loss is now expected to be in a range between $125 million and $170 million, updated from the previously disclosed range of between $40 million and $95 million; and
– Adjusted net loss per diluted share is now expected to be in a range of $(0.04) and $(0.00), updated from the previously disclosed Adjusted net income per diluted share range of between $0.02 and $0.06.
The company’s outlook for sales and same store sales remains unchanged as sales, prescription count growth and pharmacy reimbursement rates continue to be in line with expectations. The expectation for capital expenditures also remains unchanged.
