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Rite Aid shares slip as first-quarter earnings fall short

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Pharmacy reimbursement rates challenged Rite Aid earnings in the latest quarter, Chairman and CEO John Standley said, in a statement.

Rite Aid shares slipped more than 1 percent Thursday after releasing its first-quarter results. The stock ended the day slightly lower.

The drugstore chain reported adjusted quarterly earnings at 1 cent per share, below a Reuters estimate of 5 cents a share. Revenue rose 23 percent to $8.2 billion on a year-over-year basis, but came in below a forecast of $8.26 billion.

Standley said the chain wasn't able to offset the rate pressure through drug purchasing efficiencies.

"While drug cost reductions will continue to be short of our expectations in the near term, we anticipate improvements over the second half of the fiscal year. As we work to meet this challenge, we remain focused on executing our highly successful sales initiatives like wellness+ with Plenti and the Wellness store program while also making strategic investments for growth and delivering a consistently outstanding customer experience," he said in a statement.

Shares of Rite Aid jumped last week after a report said there are growing signs that the Federal Trade Commission will approve Walgreens' $17 billion acquisition of Rite Aid. The two drugstores agreed to merge in February 2015.

Rite Aid said it expects to close deal with Walgreens Boots Alliance in the second half of this year.

Rite Aid's stock is just slightly lower so far this year.

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