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Factors Likely to Influence Rite Aid (RAD) in Q3 Earnings

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Rite Aid Corporation (RAD - Free Report) is scheduled to report third-quarter fiscal 2022 results on Dec 21, before the opening bell.

The Zacks Consensus Estimate for its fiscal third-quarter revenues is pegged at $6.28 billion, suggesting a 2.7% increase from the prior-year quarter’s reported figure of $6.12 billion. The Zacks Consensus Estimate for the fiscal third-quarter bottom line is pegged at a loss of 18 cents, whereas it reported earnings of 40 cents in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.

In the last reported quarter, the drugstore retailer’s earnings beat estimates by 2.4%. The company has an earnings surprise of 1,044.1%, on average, for the trailing four quarters.

Rite Aid Corporation Price and EPS Surprise

 

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 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.

Rite Aid expanded the Instacart delivery service and made partnerships 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 third-quarter results.

The company remains on track with its efforts to strengthen the foothold 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 are likely to have helped expand the customer base. Its RxEvolution strategy also bodes well. These are likely to have contributed to sales growth in the to-be-reported quarter.

However, the company has continued to witness elevated expenses due to a rise in wages and increased investments to drive revenues. This is likely to have persisted in the quarter under review.

Sluggishness in front-end same-store sales, owing to lower demand for general cleaning products, sanitizers, wipes, paper products, liquor, and over-the-counter products, is expected to have acted as a deterrent. Lesser cases of cough, cold, and flu are expected for the second half of fiscal 2022.

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 With Favorable Combinations

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:

Boot Barn Holdings (BOOT - Free Report) has an Earnings ESP of +0.91% and it currently sports a Zacks Rank of 1. The company is anticipated to register an increase in the bottom and top lines when it reports third-quarter fiscal 2022 results. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BOOT’s quarterly earnings was unchanged in the last 30 days to $1.98 per share. The same suggests a 98% jump from the year-ago quarter’s reported number. The Zacks Consensus Estimate for Boot Barn’s quarterly revenues is pegged at $461.5 billion, which suggests a rise of 52.6% from the figure reported in the prior-year quarter.

CarMax (KMX - Free Report) currently has an Earnings ESP of +6.75% and a Zacks Rank of 3. The Zacks Consensus Estimate for its third-quarter fiscal 2022 earnings moved up by a penny in the last seven days to $1.50 per share, indicating 5.6% growth from the year-ago quarter’s reported number.

CarMax’s top line is expected to have risen year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $7.63 billion, suggesting growth of 47.2% from the figure reported in the prior-year quarter.

Sally Beauty Holdings (SBH - Free Report) currently has an Earnings ESP of +3.28% and a Zacks Rank of 3. The company is likely to register growth in the bottom and top lines when it reports first-quarter fiscal 2022.

The Zacks Consensus Estimate for SBH’s quarterly earnings moved up by a penny in the last 30 days to 61 cents per share. This suggests a 22% jump from the year-ago quarter’s reported number. The Zacks Consensus Estimate for Sally Beauty’s quarterly revenues is pegged at $995.7 million, suggesting a rise of 6.4% from the figure reported in the prior-year quarter.