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Rite Aid (RAD) to Report Q2 Earnings: What's in the Cards?
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Rite Aid Corporation is slated to report second-quarter fiscal 2018 results on Sep 28. The big question facing investors is whether this drug store retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, the company reported a negative surprise as a loss per share of 2 cents was wider than the Zacks Consensus Estimate of 5 cents. Further, the company has underperformed the Zacks Consensus Estimate by an average of 20.8% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
The Zacks Consensus Estimate for the quarter under review is a loss of 2 cents per share, compared with earnings of 3 cents per share reported in the year-ago quarter. We note that the Zacks Consensus Estimate has been stable ahead of the earnings release.
Factors at Play
The company’s negative surprise trend in recent quarters and the termination of the merger deal with Walgreens Boots Alliance Inc. (WBA - Free Report) has led the stock to underperform the industry in the last three months. Shares of Rite Aid have declined 22.2%, against the industry’s growth of 2.6%.
The company suffered a loss in first-quarter 2018 driven by soft sales due to negative comparable store sales (comps) that stemmed from lower pharmacy and front-end sales. Further, Rite Aid continues to battle lower pharmacy reimbursement rates that hurt margins in first-quarter fiscal 2018.
However, the recent Federal Trade Commission’s ("FTC") approval for the sale of 1,932 Rite Aid stores to Walgreens for $4.375 billion bodes well. This will help in lowering Rite Aid’s debt and improving financial flexibility, making it a smaller, yet stronger independent firm with solid control in key markets. Further, the company's stringent focus on cost management and strengthening its portfolio of health and wellness services also remain impressive.
Nonetheless, let’s see if Rite Aid’s growth drivers can help counter the challenges this time around.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Rite Aid is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Rite Aid has an Earnings ESP of -33.33%, with the current Zacks Consensus Estimate pegged at a loss of 2 cents per share. While the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Costco Wholesale Corp. (COST - Free Report) currently has an Earnings ESP of +0.35% and a Zacks Rank #2.
Build-A-Bear Workshop, Inc. (BBW - Free Report) has an Earnings ESP of +13.79% and a Zacks Rank #2.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
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Rite Aid (RAD) to Report Q2 Earnings: What's in the Cards?
Rite Aid Corporation is slated to report second-quarter fiscal 2018 results on Sep 28. The big question facing investors is whether this drug store retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, the company reported a negative surprise as a loss per share of 2 cents was wider than the Zacks Consensus Estimate of 5 cents. Further, the company has underperformed the Zacks Consensus Estimate by an average of 20.8% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
Rite Aid Corporation Price and EPS Surprise
Rite Aid Corporation Price and EPS Surprise | Rite Aid Corporation Quote
What to Expect?
The Zacks Consensus Estimate for the quarter under review is a loss of 2 cents per share, compared with earnings of 3 cents per share reported in the year-ago quarter. We note that the Zacks Consensus Estimate has been stable ahead of the earnings release.
Factors at Play
The company’s negative surprise trend in recent quarters and the termination of the merger deal with Walgreens Boots Alliance Inc. (WBA - Free Report) has led the stock to underperform the industry in the last three months. Shares of Rite Aid have declined 22.2%, against the industry’s growth of 2.6%.
The company suffered a loss in first-quarter 2018 driven by soft sales due to negative comparable store sales (comps) that stemmed from lower pharmacy and front-end sales. Further, Rite Aid continues to battle lower pharmacy reimbursement rates that hurt margins in first-quarter fiscal 2018.
However, the recent Federal Trade Commission’s ("FTC") approval for the sale of 1,932 Rite Aid stores to Walgreens for $4.375 billion bodes well. This will help in lowering Rite Aid’s debt and improving financial flexibility, making it a smaller, yet stronger independent firm with solid control in key markets. Further, the company's stringent focus on cost management and strengthening its portfolio of health and wellness services also remain impressive.
Nonetheless, let’s see if Rite Aid’s growth drivers can help counter the challenges this time around.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Rite Aid is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Rite Aid has an Earnings ESP of -33.33%, with the current Zacks Consensus Estimate pegged at a loss of 2 cents per share. While the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Constellation Brands Inc. (STZ - Free Report) currently has an Earnings ESP of +0.99% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco Wholesale Corp. (COST - Free Report) currently has an Earnings ESP of +0.35% and a Zacks Rank #2.
Build-A-Bear Workshop, Inc. (BBW - Free Report) has an Earnings ESP of +13.79% and a Zacks Rank #2.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
See these buy recommendations now >>