Business

Rite Aid will close at least 63 stores in the coming months

Rite Aid store in downtown Los Angeles, California, USA, October 16, 2019 Image taken on October 16, 2019.

Mike Blake | Reuters

Pharmacy chain Rite Aid said on Tuesday that it plans to close at least 63 stores as it reconsiders how many points it needs.

The company said the closures were identified as part of an ongoing review and expects additional stores to close in the next few months.

Rite Aid said its goal is to reduce costs, increase profitability and create a “healthy base”. The company said the closure of 63 businesses, which began last month, is expected to boost its earnings before interest, taxes, depreciation and amortization by about $ 25 million.

On Tuesday, Rite Aid released mixed financial results for its third fiscal quarter. While it earned more than expected on an adjusted basis, its sales in the three months ended Nov. 27 were lower than analysts had forecast. The retailer also cut its fiscal year sales forecast.

Rite Aid shares rose more than 16% in early trading. At the close of the market on Monday, the stock is down roughly 22% YTD, bringing Rite Aid’s market capitalization to nearly $ 692 million.

A list of dozens of stores that Rite Aid plans to close was not immediately available. Rite Aid operates over 2,400 retail pharmacies in the United States.

Pharmacy rival CVS Health said last month that it will close around 900 stores over the next three years as it adapts to shoppers who shop more online.

Both CVS and Walgreens have focused more efforts on digital growth and turned stores into destinations that offer a wide range of healthcare services, from flu shots to diagnostic tests.

Find the complete press release on Rite Aid Income here


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