Rithm Acquisition Corp.

Rite Aid reported first-quarter fiscal 2024 adjusted EBITDA of $91.7 million, down from $100.1 million last year. The company reported a net loss of $306.7 million, or $5.56 per share, and adjusted net loss of $40.1 million, or $0.73 per share; results included a $152 million noncash goodwill impairment charge at Elixir. Retail Pharmacy revenue increased 3.4% year over year, same-store sales increased 8.4%, pharmacy same-store sales increased 13.3%, and front-end same-store sales excluding cigarettes and tobacco declined 3.8%. Elixir revenue was $1.2 billion, down 30%, and Elixir adjusted EBITDA was $21.7 million versus $26.4 million a year ago. Guidance now calls for Elixir adjusted EBITDA of $90 million to $100 million, Retail EBITDA of $240 million to $260 million, total revenue of $22.6 billion to $23 billion, capital spending of $175 million, and fiscal 2024 cash use of approximately $100 million to $150 million. Management also said it expects roughly 60% of full-year adjusted EBITDA to come in the second half of the year.

Busy Burr framed the quarter as better than plan despite headwinds from weak front-end sales and higher-than-expected medical loss ratio at Elixir Insurance. She emphasized that pharmacy script growth, improved recovery rates, generic drug settlements, and SG&A control are starting to show traction, and said the company is building a longer-term foundation rather than chasing quick wins. Her tone was constructive but urgent, with repeated focus on execution, store-level initiatives, and long-term value creation.

Matt Schroeder quantified the quarter and the guidance changes. He highlighted the $91.7 million adjusted EBITDA, $306.7 million net loss, $152 million Elixir goodwill impairment, and $1.15 billion of liquidity at quarter end, while noting operating cash use of $372.5 million was driven by a CMS receivable build and timing of receivables and rent. On margins and costs, he said retail SG&A improved by $4.8 million, Elixir EBITDA margin improved by 28 basis points, generic drug pricing is stabilizing, and drug purchasing came in slightly better than expected. He also said capex guidance was lowered to $175 million, revenue guidance was raised because of higher Ozempic and GLP-1 volume plus Elixir utilization, but those items are margin neutral.

Analysts pressed on the size and durability of the pharmacy turnaround, the impact of the Kroger/ESI dispute, front-end weakness, shrink, and the Elixir decision to exit individual Part D. Management said script growth should continue through the year, front-end initiatives will likely show more benefit in the back half, and the Med D lives being exited are about 300,000 and are “practically breakeven” on an underwriting basis. On Elixir, management said the higher MLR was driven more by membership mix and adverse selection than any single drug category, and that it is still early in the selling season, though bid feedback has been encouraging.