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Rite Aid shares skid after weak second quarter sales and revenue

  • Despite improved profits at Rite Aid, shares sank after it reports a revenue miss and a drop in same-store sales.
  • Shares of Rite Aid are down 11 percent, trading around $2 per share. The stock is down more than 70 percent this year, according to FactSet.

Despite improved quarterly profits, Rite Aid shares plunged Thursday after the drugstore operator reported revenue that missed forecasts and said same-store sales fell 3.4 percent.

Shares of Rite Aid were down about 11 percent, trading around $2 per share. The stock is down more than 70 percent this year, according to FactSet.

Before the opening bell, Rite Aid said it lost 1 cent per share for the second quarter, matching Thomson Reuters' forecasts, while revenue was short at $7.7 billion. Wall Street expected $7.84 billion in revenue, according to a Thomson Reuters consensus estimate.

The company also said same-store sales for the quarter decreased 3.4 percent over the prior year, consisting of a 4.6 percent decrease in pharmacy sales and a 0.9 percent decrease in front-end sales.

Rite Aid said the improvement in operating results "was due primarily to receipt of the $325 million merger termination fee" from Walgreens for a failed merger.

Rite Aid Chairman and CEO John Standley said the overall performance reflects a "challenging reimbursement rate environment and the effects of an extended merger and asset sale process." Walgreens received regulatory approval last week to buy stores from Rite Aid, but the agreement was for fewer stores than had previously been proposed.

"Securing regulatory clearance for the amended asset sale agreement with Walgreens Boots Alliance gives us a clear path forward to realize the benefits of the transaction and implement our plans to deliver improved results," Standley said in a statement.

Walgreens said it had clearance from the Federal Trade Commission to buy 1,932 stores from Rite Aid for $4.38 billion. That was 254 fewer stores than it had intended in June.

The move to reduce the number of stores was seen a way to resolve antitrust concerns after repeated failed attempts at a deal. That announcement came three months after Walgreens called off its near two-year deal to buy Rite Aid.