Retail pharmacy Rite Aid Corp. reported third-quarter earnings results before the opening bell Thursday. The drug store chain handily beat the street with quarterly adjusted diluted earnings per share of $0.10 on revenues of $6.69 billion. Rite Aid reported EPS of $0.04 on revenue of $6.36 billion in the third quarter last year. Thomson Reuters consensus analyst estimates for Rite Aid projected an EPS of $0.05 and $6.65 billion in revenue.
Shares of the third-largest drugstore chain in the U.S. were up 12% at $6.79 as 1 PM ET Thursday.
More on Rite Aid 3Q earnings
The company noted the solid 5.3% increase in revenues this quarter resulted largely from an increase in same-store sales compared with last year.
Moreover, the increase in net income was fueled by a nice move up in adjusted earnings before interest, taxes and amortization, as well as a lower last-in, first-out charge that was partly offset by a higher loss on debt retirement related to the redeeming of some senior secured notes.
Rite Aid Corp. also reported that its pharmacy sales reflected an around 228 basis point negative impact from new introductions of lower-priced generic drugs. Furthermore, the total count of prescriptions filled in the same stores was up 4.5% compared with 3Q last year.
Statement from Rite Aid CEO
The pharmacy chain continues “to face significant reimbursement rate pressure” on drug costs, but was able to mitigate that pressure during the third quarter, Rite Aid Chairman and CEO John Standley explained in a conference call with analysts Thursday morning.
“We have always found a way to purchase a little better than the year before, and that’s our expectation that those trends will continue,” Standley noted. And reimbursement rates will inevitably come down to some degree over that same period of time, but the balancing act that we always talk about is trying to get costs and reimbursement rates to align up.”