Rite Aid shares rocket higher after big profit and 3Q beat

Business

FILE – This June 25, 2019, file photo shows a sign for a Rite Aid Pharmacy is on the facade at a strip mall in Harmony, Pa. Rite Aid Corporation reports financial results on Thursday, Dec. 19. (AP Photo/Keith Srakocic, File)

Rite Aid shares may be in for their biggest one-day jump in more than two years Thursday after the struggling drugstore chain posted a rare quarterly profit and easily topped analyst expectations.

The company said it booked $51.5 million in net income in its fiscal third quarter mainly because of a big gain from some debt retirement. That compared to a $4.5 million loss in last year’s quarter.

Earnings, adjusted for one-time gains and costs, came to 54 cents per share, far surpassing the 7 cents Wall Street had expected, according to a survey by FactSet.

Revenue edged up slightly to $5.46 billion, also beating analyst projections for $5.42 billion in the quarter that ended Nov. 30.

Rite Aid runs more than 2,400 drugstores in 18 states. The company has struggled, like larger rivals CVS and Walgreens, with reimbursement cuts and thinner profits from some drugs, among other problems.

The company’s shares slipped below $1 about a year ago, which forced the company to chop its share count by about 95% last spring. That pushed the price of the remaining shares above minimum trading requirements on the New York Stock Exchange.

Rite Aid jettisoned long-time CEO John Standley and several other top executives earlier this year. In August, it named former insurance executive Heyward Donigan CEO.

The company said Thursday that it now expects fiscal 2020 adjusted earnings of between 13 cents and 55 cents per share. That’s a narrower range compared to a forecast it made in September for between 0 and 56 cents per share.

Shares of Rite Aid Corp., based in Camp Hill, Pennsylvania, jumped nearly $2 or about 24% to $10.33 before markets opened Thursday.

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