Source: Company reports

1Q17 RESULTS

Rite Aid reported adjusted fiscal 1Q17 EPS of $0.01 versus the consensus estimate of $0.05. Total revenues were $8.18 billion, up 23.1% year over year, versus expectations of $8.24 billion. Retail pharmacy segment revenues were $6.7 billion and increased by 0.4% compared year over year, along with an increase in same-store sales of 0.4%. The same-store sales increase was driven by a 0.1% increase in pharmacy sales and a 1.2% increase in front-end sales. Revenues in the pharmacy services segment, which was acquired on June 24, 2015, were $1.6 billion. The quarter’s results reflect strong performance in the pharmacy services segment and the front-end business that was offset by pharmacy reimbursement rate pressure. As previously announced on October 27, 2015, Rite Aid and Walgreens Boots Alliance have entered into a definitive agreement under which Walgreens will acquire all outstanding shares of Rite Aid for $9.00 per share in cash, for a total enterprise value of approximately $16.6 billion, including acquired net debt. Both companies’ boards of directors and Rite Aid’s shareholders have approved the transaction, which is subject to approval under applicable antitrust laws and other customary closing conditions. The transaction is expected to close in the second half of calendar 2016.