On Tuesday, the drugstore chain Rite Aid announced it will be shutting down a minimum of 63 stores.
According to CNBC, the chain said it will be closing the stores due to a continuing review and it expects to discover more stores to shut down in the coming months.
The company released its earnings report, stating, in part:
- Revenues from Continuing Operations Increased 1.8 Percent to $6.23 Billion Compared to Prior Year Third Quarter Revenues from Continuing Operations of $6.12 Billion
- Third Quarter Net Loss from Continuing Operations of $36.1 Million or $0.67 Per Share, Compared to the Prior Year Third Quarter Net Income of $4.3 Million or $0.08 Per Share
- Third Quarter Adjusted Net Income from Continuing Operations of $8.2 Million or $0.15 Per Share, Compared to the Prior Year Third Quarter Adjusted Net Income of $21.6 Million or $0.40 Per Share
“We delivered a solid quarter as we grew Adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization] by 12.7 percent versus last year,” said Heyward Donigan, the president and chief executive officer of Rite Aid. “Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off.”
“Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million,” he added.
“Finally, I want to thank each and every one of our associates for everything they do. It is my greatest privilege to work alongside such a tremendous team, and I am forever grateful for their passion and commitment to our company, our customers and each other,” Donigan concluded.
CNBC reported: “… Although it earned more than expected on an adjusted basis, its sales for the three months ended Nov. 27 came in lower than analysts expected. The retailer also cut its outlook for sales for the fiscal year.
“Rite Aid shares were falling about 2% in premarket trading. The stock has dropped roughly 22% year to date, putting its market capitalization at nearly $692 million,” the outlet added.
CNN Business reported: “Rite Aid has approximately 2,500 stores across 19 states, so the closures amounts to just 2% of its retail footprint.”
The move comes as other drug store companies are taking steps to change their models. Rite Aid also has been reportedly altering some of its shops in order to prioritize areas for beauty products, personal care items, and vitamins, with not as much space given to household appliances and other items.
Last month, CVS announced its plans to shutter 900 stores in a pivot toward health resources.
As The Daily Wire reported, “[t]he firm will create primary-care services at some sites, while converting others into health hubs that provide mental health services, hearing exams, and other screenings.”
“The company has been evaluating changes in population, consumer buying patterns and future health needs to ensure it has the right kinds of stores in the right locations for consumers and for the business,” CVS announced in a statement.