Soft Cold And Flu Season Drives $18.5 Million Loss For Rite Aid

The pandemic is a two-sided coin for the pharmacy and drug store category. Consumers needed more preventative health products, but they also took better care of themselves. Both added up to Rite Aid’s wider-than-expected fiscal fourth-quarter loss, as it struggled with an uncharacteristically “soft” cold and flu season thanks to heightened consumer self-care and fewer elective procedures.

For the fourth quarter, the company reported a net loss from continuing operations of $18.5 million, or $0.34 loss per share, as well as adjusted net loss from continuing operations of $41.8 million, or $0.78 loss per share. Adjusted earnings before income, taxes, depreciation and amortization were $41.3 million, Rite Aid said. Revenue came in at $5.92 billion vs. $5.73 billion in the year-earlier quarter.

The company has been trying to reach different consumers with a more holistic approach. Last year, Rite Aid announced a new integrated rebranding effort as part of its RxEvolution strategy – originally announced in March – to transform the company into a whole-health destination that treats the mind, body and spirit.

“We remain very optimistic about the direction of Rite Aid, despite a fourth quarter that was impacted by a historically soft cough, cold and flu season, the deferral of elective procedures and related acute prescription volume and the impact of COVID-19 on selling, general and administrative expenses,” said Heyward Donigan, president and chief executive officer, Rite Aid. “This past year, we made significant progress in bringing our RxEvolution strategy to life. We redefined the role of the pharmacist, rebranded both our retail pharmacy business and Elixir, completed the strategic acquisition of Bartell’s and moved quickly to deliver solutions to meet customer needs for COVID-19 testing and vaccine administration.”

Elixir, a pharmacy benefits and services company headquartered in Twinsburg, Ohio, was purchased by RiteAid in 2015. It offers its 20 million+ members more pharmacy options, with a focus on improved manufacturer relationships and analytic capabilities.

Donigan is optimistic about the effect that vaccines will have on a return to growth. “As we look ahead, our teams are continuing their heroic efforts to serve our communities and customers during this critical time. I am pleased to announce that we have administered over two million COVID-19 vaccines so far in the first quarter,” she said. “We are also seeing prescription count trends, both acute and maintenance, return to positive levels. At Elixir, we are experiencing growth in our sales pipeline, and have recently been awarded over 200,000 new lives and over six million annualized scripts, with additional decisions pending in the current sales cycle. I am so proud of our 50,000 associates and the strategic progress we’re making in our journey to revitalize our brand and elevate the crucial role that pharmacy plays in the health of our customers.”