Rite Aid Reports Q1 Loss, Tops Revenue Estimates

Rite Aid (RAD - Free Report) came out with a quarterly loss of $0.04 per share versus the Zacks Consensus Estimate of a loss of $0.54. This compares to loss of $0.14 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 92.59%. A quarter ago, it was expected that this drugstore chain would post a loss of $0.13 per share when it actually produced a loss of $0.37, delivering a surprise of -184.62%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Rite Aid, which belongs to the Zacks Retail - Pharmacies and Drug Stores industry, posted revenues of $6.03 billion for the quarter ended May 2020, surpassing the Zacks Consensus Estimate by 7.66%. This compares to year-ago revenues of $5.37 billion. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Rite Aid shares have lost about 16.8% since the beginning of the year versus the S&P 500's decline of -5.6%.

What's Next for Rite Aid?

While Rite Aid has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

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Matthew Hoenig 3 months ago Member's comment

In the world's current climate, it's no surprise that companies' EPS estimates are expected to be lower. On the other hand, it's no surprise to me that Rite Aid has surpassed consensus EPS estimates three times. Now, people are more conscious of staying healthy so I would have expected a drug store chain to operate successfully.