Cramer demands answers from Rite Aid
CNBC's Jim Cramer on Thursday sought answers from Rite Aid after the retailer cut its full-year profit forecast for a second time this year and lowered the top end of its sales forecast.
"They blew up the quarter, but the guidance is horrendous. It's horrendous," Cramer said on "Squawk on the Street." "They lost exclusivity on certain drugs that were generic, but you know what, that's not good enough" of an explanation.
Darren Karst is new to his role as chief finance officer of the third-largest U.S. drugstore chain, Cramer conceded. He also acknowledged Rite Aid has cleaned up its balance sheet and saw shares nearly double over the past five years. Still, he wouldn't let this quarter slide.
"This is unacceptable. It's unacceptable to say that this was unpredictable," Cramer said. "At a certain point, given what happened at Walgreen's, they should know better and so they have to make some answers."
Last month, Walgreen's CFO, Wade Miquelon, and another top executive lost their jobs after a $1 billion forecasting error in the company's Medicare-related business, The Wall Street Journal reported.
"I want explanations about things that, to me, should have been telegraphed, particularly after what happened with Walgreen's," Cramer said. "Rite Aid owes us more of an explanation than they're giving us."
Rite Aid did not immediately respond to a request for comment.
Shares of Rite Aid fell sharply in midmorning trading Thursday, with the highest volume so far on the New York Stock Exchange.
Investors interested in the pharmacy business should consider CVS Health instead, Cramer said.
—By CNBC's Drew Sandholm. Reuters contributed to this report.
DISCLOSURE: When this story was published, Cramer's charitable trust did not own CVS Health or Rite Aid. It did, however, own Walgreen shares.