Factors Likely to Decide Rite Aid's (RAD) Fate in Q4 Earnings
Rite Aid Corporation RAD is scheduled to report fourth-quarter fiscal 2022 results on Apr 14, before the opening bell. The Zacks Consensus Estimate for its fiscal fourth-quarter revenues is pegged at $6 billion, suggesting a 0.5% increase from the prior-year quarter’s reported figure of $5.9 billion. The Zacks Consensus Estimate for the fiscal fourth-quarter bottom line is pegged at a loss of 57 cents, suggesting growth of 27% from a loss of 78 cents in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.
The Zacks Consensus Estimate for the company’s fiscal 2022 bottom line is pegged at a loss of 27 cents, indicating an 80% decline from the year-ago quarter’s reported figure. Meanwhile, the consensus mark for revenues stands at $24.5 billion, suggesting growth of 1.7% from the prior-year reported figure.
In the last reported quarter, the drugstore retailer’s earnings beat estimates by 183.3%. The company has a trailing four-quarter earnings surprise of 64.9%, on average.
Key Factors to Note
Rite Aid has been gaining from continued strength in its delivery services. Some notable efforts include free-of-charge home delivery service with an eligible prescription, pick-up services, drive-through for prescriptions and over-the-counter products, Buy Online Pickup In Store initiative, and curbside pick-up options. The company expanded the Instacart delivery service and partnered with Amazon, Postmates and Instacart for home delivery, which have been contributing to digital sales growth. RAD partnered with DoorDash and Shipt to offer same-day delivery of non-prescription health, convenience and wellness essentials. Rite Aid collaborated with ScriptDrop to expedite the prescription delivery process. The impacts of such endeavors are likely to get reflected in the fiscal fourth-quarter results.
It remains on track with its efforts to strengthen its presence in mid-market PBM by innovation across its retail and mail-order pharmacy channels, enhanced in-store experience, curated digital offerings, improved merchandise, and rebranded image with a new logo. Rite Aid’s newly launched Stores of the Future and the acquisition of Bartell might have helped expand the customer base. Its RxEvolution strategy bodes well. These are likely to have contributed to sales growth in the to-be-reported quarter.
The company has been witnessing elevated expenses stemming from higher payroll costs, elevated bonus expenses for store field and corporate associates, a rise in compensation and the inclusion of the Bartell-related expenses. This is likely to have persisted in the quarter under review.
On its last earnings call, management slashed its fiscal 2022 view. Management anticipated sales of $24.4-$24.7 million, down from the earlier mentioned $25.1-$25.5 billion. The Pharmacy services segment’s sales were forecast to be $7.1-$7.2 billion, down from the previously mentioned $7.7-$7.8 million. Although adjusted net loss was envisioned to be 49-4 cents as compared with the previously mentioned loss of 90-53 cents, its mid-point of a loss of 26.5 cents compares unfavorably with fiscal 2021 reported figure of a loss of 15 cents.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Rite Aid this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Rite Aid has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Auto Nation AN has an Earnings ESP of +0.58% and a Zacks Rank of 1. The company is expected to register top and bottom-line growth when it reports first-quarter 2022 numbers. The Zacks Consensus Estimate for AN’s quarterly revenues is pegged at $6.6 billion, which suggests growth of 12.3% from the prior year reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Auton Nation’s quarterly earnings has moved up 1.3% in the past 30 days to $5.39 per share, suggesting 93.2% growth from the year-ago reported number. AN has a trailing four-quarter earnings surprise of 39.3%, on average.
Tractor Supply Company TSCO currently has an Earnings ESP of +3.60% and a Zacks Rank #2. TSCO is likely to register top-line growth when it reports first-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.9 billion, which suggests growth of 3.8% from the prior-year quarter.
The Zacks Consensus Estimate for Tractor Supply’s quarterly earnings has remained stable in the past 30 days at $1.39 per share, suggesting a decline of 10.3% from the year-ago quarter’s reported number. TSCO has a trailing four-quarter earnings surprise of 22%, on average.
Fastenal FAST currently has an Earnings ESP of +2.94% and a Zacks Rank #3. FAST is anticipated to register top and bottom-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for the quarterly revenues is pegged at $1.68 billion, indicating an improvement of 18.4% from the prior-year quarter.
The Zacks Consensus Estimate for Fastenal’s bottom line has remained stable in the past 30 days at 44 cents per share. The consensus estimate suggests growth of 18.9% from the year-ago quarter’s reported figure. FAST has a trailing four-quarter earnings surprise of 3.3%, on average.
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