Here's How Rite Aid (RAD) is Placed Just Ahead of Q3 Earnings
Rite Aid Corporation RAD is scheduled to report third-quarter fiscal 2023 results on Dec 21, before the opening bell. The drugstore retailer is likely to have witnessed top and bottom-line declines in the to-be-reported quarter.
The Zacks Consensus Estimate for the fiscal third-quarter bottom line is pegged at a loss of 32 cents, suggesting a decline of 313.3% from earnings of 15 cents reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days. The Zacks Consensus Estimate for its fiscal third-quarter revenues is pegged at $5.9 billion, suggesting a 4.7% decline from the prior-year quarter’s reported figure of $6.2 billion.
In the last reported quarter, RAD witnessed a negative earnings surprise of 37%. The company has a trailing four-quarter earnings miss of 6.3%, on average.
Rite Aid Corporation Price and EPS Surprise
Rite Aid Corporation price-eps-surprise | Rite Aid Corporation Quote
Key Factors to Note
Rite Aid has been reeling under sluggishness in the Retail Pharmacy and Pharmacy Services segments. The company has been witnessing muted demand for COVID tests and vaccines, the adverse impacts of closed stores, and reduced Elixir insurance memberships. Such factors are likely to have dented the company’s top-line performance in the fiscal third quarter.
However, higher non-COVID prescriptions, strength in PBM and the continued expansion of delivery services have been major growth drivers. The increased use of high-cost drugs at Elixir bodes well.
The company has been offering home delivery service to customers with an eligible prescription, with the benefit of zero delivery fee. It has also been providing pickup and drive-through services for prescriptions and over-the-counter products at its stores. RAD launched the Buy Online Pickup In Store initiative to offer better drive-through and curbside pickup options.
The company has been focused on accelerating growth of riteaid.com’s e-commerce sales and expanding its buy online, pick up at store offerings. Continued strength in on-demand delivery, third-party marketplaces, and buy online, pick up at store options are likely to have aided the company’s performance in the to-be-reported quarter.
Rite Aid has been focusing on strengthening its foothold in mid-market PBM, innovating across its retail and mail-order pharmacy channels, enhancing the in-store experience by curated digital offerings, improving merchandise, and rebranding its image with a new logo.
Rite Aid’s Stores of the Future and the acquisition of Bartell are anticipated to have helped expand the customer base. Alongside this, it launched a loyalty program to improve front-end margins, expanded its brands and enhanced PBM margins via its new rebate aggregation agreement. The company has been making efforts to grow the Elixir membership and reposition its approach to the Elixir Insurance Part D business. These efforts are likely to have boosted earnings in the fiscal third quarter.
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 that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
NIKE Inc. NKE currently has an Earnings ESP of +1.09% and a Zacks Rank #3. NKE is likely to register top-line growth when it reports second-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $12.6 billion, suggesting 11% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NIKE’s fiscal second-quarter earnings is pegged at 65 cents, suggesting a 21.7% decline from 83 cents reported in the year-ago quarter. The consensus estimate for earnings has moved down by a penny in the past seven days. NKE has delivered an earnings beat of 16.1%, on average, in the trailing four quarters.
Carnival Corp. CCL currently has an Earnings ESP of +3.40% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for CCL’s quarterly revenues is pegged at $3.98 billion, which suggests growth of 209.1% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Carnival’s quarterly loss has widened by 2 cents in the past seven days to 89 cents per share. However, the consensus estimate for loss suggests an improvement from the year-ago quarter’s reported loss of $1.72 per share. CCL has delivered a bottom-line miss of 120%, on average, in the trailing four quarters.
General Mills GIS currently has an Earnings ESP of +0.11% and a Zacks Rank #3. GIS is anticipated to register top and bottom-line growth when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.2 billion, indicating an improvement of 2.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for General Mills’ earnings of $1.06 per share has moved up by a penny in the past seven days. The consensus estimate suggests growth of 7.1% from 99 cents reported in the year-ago quarter. GIS has delivered an earnings beat of 6.1%, on average, in the trailing four quarters.
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