Cuts FY21 Rev $24.0B v $24.2Be (prior $23.9-24.2B), adj EBITDA $425-435M (prior $490-520M), SSS +3.5% y/y (prior +3.5-4.5%)
Wednesday, March 24, 2021 4:05:15 PMEST
- Cuts FY21 capex $315M (prior $325M)
- Guides FY21 net loss $90-100M
- Rite Aid Corporation’s (NYSE: RAD) fourth quarter 2021 financial results were significantly impacted by a soft cough, cold and flu season, ongoing impacts related to COVID-19 and challenging weather conditions. As a result, the Company is updating its guidance for the fiscal year ended February 27, 2021.
- “During the fourth quarter our industry was impacted by a historically soft cough, cold and flu season, as well as the continued impacts of COVID on the deferral of elective procedures and related acute prescription volume and selling, general and administrative expenses. In addition, there were significant weather events in February that impacted our supply chain and depressed sales,” said Heyward Donigan, president and CEO of Rite Aid. “Looking ahead, we have seen acute prescriptions return to positive levels in March, and we are proud to be selected as one of the retail providers administering COVID vaccines in the majority of our key states and cities, representing over 1,800 of our stores. We are significantly ramping up the number of vaccines we are administering on a daily basis, and have administered approximately 1 million COVID vaccines in March to date. Despite the extraordinary external headwinds that impacted our fourth quarter results, the entire organization is engaged, motivated and relentless in the execution of our RxEvolution strategy.”
- Front-end comparable same store sales declined approximately 5.6 percent in the quarter ended February 27, 2021, driven by a decline of nearly 37 percent in cough, cold and flu related categories. The decline in these categories had a disproportionately negative impact on front-end gross profit, as these are comprised of higher margin products. Comparable same store prescriptions declined approximately 1.0 percent, driven by an over 14 percent decline in acute prescriptions. The Company also incurred incremental COVID related SG&A expenses due to a one time hero-pay bonus, cleaning costs, pandemic sick leave and other incremental operating costs. Rite Aid Corporation estimates the following impacts on fourth quarter adjusted EBITDA:
The total unanticipated impact on the quarter results was approximately $50 million to $60 million.
***Prior guide on 12/17/20:
- Raises FY21 $0.45-0.85 v $0.06e; Rev $23.9-24.2B v $23.8Be, SSS +3.5-4.5% (prior -$0.67 to +$0.09, Rev $23.5-24.0B, SSS +3-4%)
- Raises mid-point FY21 EBITDA $490-520M, Raises Capex ~$325M (prior EBITDA $175-525M, Capex ~$275M)
- Cuts FY21 FCF $50-100M (prior '$110-160M')
~
- Guides FY21 net loss $90-100M
- Rite Aid Corporation’s (NYSE: RAD) fourth quarter 2021 financial results were significantly impacted by a soft cough, cold and flu season, ongoing impacts related to COVID-19 and challenging weather conditions. As a result, the Company is updating its guidance for the fiscal year ended February 27, 2021.
- “During the fourth quarter our industry was impacted by a historically soft cough, cold and flu season, as well as the continued impacts of COVID on the deferral of elective procedures and related acute prescription volume and selling, general and administrative expenses. In addition, there were significant weather events in February that impacted our supply chain and depressed sales,” said Heyward Donigan, president and CEO of Rite Aid. “Looking ahead, we have seen acute prescriptions return to positive levels in March, and we are proud to be selected as one of the retail providers administering COVID vaccines in the majority of our key states and cities, representing over 1,800 of our stores. We are significantly ramping up the number of vaccines we are administering on a daily basis, and have administered approximately 1 million COVID vaccines in March to date. Despite the extraordinary external headwinds that impacted our fourth quarter results, the entire organization is engaged, motivated and relentless in the execution of our RxEvolution strategy.”
- Front-end comparable same store sales declined approximately 5.6 percent in the quarter ended February 27, 2021, driven by a decline of nearly 37 percent in cough, cold and flu related categories. The decline in these categories had a disproportionately negative impact on front-end gross profit, as these are comprised of higher margin products. Comparable same store prescriptions declined approximately 1.0 percent, driven by an over 14 percent decline in acute prescriptions. The Company also incurred incremental COVID related SG&A expenses due to a one time hero-pay bonus, cleaning costs, pandemic sick leave and other incremental operating costs. Rite Aid Corporation estimates the following impacts on fourth quarter adjusted EBITDA:
- $20 million to $24 million from lower incidence in cough, cold and flu related illnesses;
- $20 million to $24 million due to difficult weather conditions; and
- $10 million to $12 million related to continued effects of COVID-19.
The total unanticipated impact on the quarter results was approximately $50 million to $60 million.
***Prior guide on 12/17/20:
- Raises FY21 $0.45-0.85 v $0.06e; Rev $23.9-24.2B v $23.8Be, SSS +3.5-4.5% (prior -$0.67 to +$0.09, Rev $23.5-24.0B, SSS +3-4%)
- Raises mid-point FY21 EBITDA $490-520M, Raises Capex ~$325M (prior EBITDA $175-525M, Capex ~$275M)
- Cuts FY21 FCF $50-100M (prior '$110-160M')