Rite Aid Corporation (RAD) on Q2 2022 Results - Earnings Call Transcript
Operator: Good day, and thank you for standing by. Welcome to Rite Aid Corporation Fiscal Year 2022 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Trent Kruse. Please go ahead. Trent Kruse: All right. Thank you, Jerome, and good morning, everyone. We welcome you to our fiscal 2022 second quarter earnings conference call. On the call with me this morning are Heyward Donigan, Jim Peters and Matt Schroeder. As we mentioned in our release, we are providing slides related to the material we will be discussing today. These slides are provided on our website at investors.riteaid.com. While management will not be speaking directly to the slides, these slides are meant to facilitate your review of the company's results and to be used as a reference document following the call. Before we start, I'd like to remind you that today's conference call includes certain forward-looking statements. These forward-looking statements are presented in the context of certain risks and uncertainties that can cause actual results to differ. These risks and uncertainties are described in our press release and Item 1A of our most recent Annual Report on Form 10-K and in other documents that we file or furnish to the SEC. Also, we will be using certain non-GAAP measures in our release and in the accompanying slides. The definition of the non-GAAP measures along with the reconciliation to the related GAAP measure are described in our press release and slides. And with that, let me turn the call over to Heyward. Heyward? Operator: Please standby, Heyward got disconnected. Heyward Donigan: Trent, I'm sorry, I got kicked out. Trent Kruse: That's okay. Hey, we were ready for you when you're – sorry about that. Heyward Donigan: Yeah. Good morning. And I apologize for our technical difficulties this morning. I want to thank you, Trent. Good morning, everyone. And very pleased with our second quarter performance, which we announced earlier this morning. Before digging into the results I want to spend a moment on the big picture. Our RxEvolution strategy is showing promising results. And I'm encouraged that we're not only exceeding expectations, but also demonstrating that our strategy is gaining momentum. We all know the important role pharmacists play in the health of the communities we serve. Never has that been more obvious than during a pandemic. We're also seeing our retail and digital evolution drive new growth and demonstrate a new Rite Aid for our retail customers. And at Elixir, we're making progress on our competitive positioning, building out our leadership teams and integrating our various assets. As a reminder, we are relentlessly focused on three things, growing our business, reducing costs, and improving our leverage ratio. One recent example of our work to reduce costs is the announcement of our new remote-first work approach. This new approach will not only help us attract and retain the best talent in a very competitive labor market, while also providing our associates the flexibility they desire. But it will also deliver expense savings through our efforts to reduce our corporate real estate footprint. Our entire team is really excited about our reimagined workplace model. So while the environment we do business in will continue to be dynamic, and at times, as we've seen very unpredictable, I'm really optimistic about our company's future and excited about the new Rite Aid we're building. As for the second quarter, we grew our revenues 2.2% to $6.1 billion, including a 6.5% increase in our retail segment. And we improved our inventory turn by 7%. Continuing our strong trends in inventory turns from prior quarters, demonstrating that people are really liking our new merchandise. Our results were driven by our vaccine administration, improved profitability at Elixir, and strong results in categories such as vitamins and upper respiratory. This generated adjusted EBITDA of $106 million, which exceeded our expectations. We also, importantly, amended and extended our revolving credit facility, successfully pushing maturity out to August 2026, as we continue to enhance our financial flexibility to drive and deliver on our RxEvolution strategy. These results reflect our continuing efforts to serve our customers and communities, especially in this rapidly changing environment when they need us the very most they ever have. Now, let me briefly discuss our most recent COVID vaccine and testing efforts. We administered nearly 2.5 million COVID vaccines in the quarter, successfully meeting the continued and increasing demand of our customers. As of today, we have now provided over 8 million vaccines in total, which we began administering the vaccine late last year. In addition, we saw COVID testing demand increased notably during the quarter, and we conducted over 700,000 free PCR tests, with turnaround time still averaging just over two days in spite of the volume. Also, in partnership with Health and Human Services, we supported summer school testing in several school districts to ensure schools are a safe environment for learning. And we believe that our support for testing has the potential to further expand, and we're ready to grow our partnerships to support additional school districts for 2021 and 2022 school years. As we move ahead, we're working closely with all of our partners at the CDC and the White House. And we are preparing for increased vaccinations to support workplaces, when it comes to their mandate, and probably boosters, although it's still a little bit undetermined. Now, let me say a few words about Elixir. As a reminder, I'm now overseeing both Rite Aid and Elixir on a day-to-day basis. And as I mentioned earlier, I'm very proud that we own all the assets we need to be successful. Laker which is the industry-leading adjudication platform, our own mail order and specialty pharmacies, and a large and growing cash card business, all of which provides the scale to drive increased economic for us and our customers. However, we still have much work to do to modernize and integrate our assets and finalize and launch the next phase of our new clinical and digital solutions. We continue to focus on preparing for the one 01/01/23 selling season. To this end, we are making progress on a number of fronts. We recently announced thatRAD Ratings Summary
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Rite Aid Corporation Shares Up 8 % on Q1 Beat
Rite Aid Corporation (NYSE:RAD) shares rose nearly 8% on Friday following the company’s reported Q1 earnings results, with EPS coming in at ($0.60), better than the Street estimate of ($0.70). Revenue was $6.01 billion, beating the Street estimate of $5.75 billion.
The company expects the full 2023-year EPS to be in the range of ($1.19)-($0.66), compared to the Street estimate of ($1.41). 2023 revenue is expected in the range of $23.6-24 billion, compared to the Street estimate of $22.91 billion. The company maintained its EBITDA target in the range of $460 million-$500 million.
Rite Aid Corporation Shares Up 8 % on Q1 Beat
Rite Aid Corporation (NYSE:RAD) shares rose nearly 8% on Friday following the company’s reported Q1 earnings results, with EPS coming in at ($0.60), better than the Street estimate of ($0.70). Revenue was $6.01 billion, beating the Street estimate of $5.75 billion.
The company expects the full 2023-year EPS to be in the range of ($1.19)-($0.66), compared to the Street estimate of ($1.41). 2023 revenue is expected in the range of $23.6-24 billion, compared to the Street estimate of $22.91 billion. The company maintained its EBITDA target in the range of $460 million-$500 million.
