Rite Aid Corporation

Q4 fiscal 2023 adjusted EBITDA was $128.6 million versus $106.1 million a year ago; full-year adjusted EBITDA was $429.2 million. Revenue was $6.09 billion in Q4 and $24.1 billion for the year. The company reported a net loss of $241.3 million, or $4.39 per share, and an adjusted net loss of $68.2 million, or $1.24 per share; Q4 included a non-cash $119 million goodwill impairment at Elixir. Retail same-store sales rose 8.9%, with pharmacy sales up 11.4%, front-end sales up 2.3%, front-end sales excluding cigarettes and tobacco up 2.8%, and same-store prescriptions up 5.2% (9.7% excluding COVID). Elixir Q4 revenue was $1.3 billion, down 20.8% versus the prior quarter, and segment adjusted EBITDA was $27.3 million versus $3.7 million a year ago. For fiscal 2024, adjusted EBITDA is guided to $340 million-$370 million, retail adjusted EBITDA to $240 million-$260 million, Elixir adjusted EBITDA to $100 million-$110 million, revenue to $21.7 billion-$22.1 billion, capex to about $225 million, and cash interest expense to about $250 million. Management said free cash flow may be slightly negative, liquidity was about $1.5 billion at year-end, and COVID vaccine volume is expected to fall from about 5.1 million in fiscal 2023 to about 3 million in fiscal 2024.

Busy Burr’s message was that Rite Aid is entering a more urgent, disciplined turnaround phase after years of limited investment because of leverage. She emphasized focusing on the core retail pharmacy and PBM businesses, adding leadership and outside consulting rigor, and prioritizing initiatives with near-term ROI rather than “long shots.” Her tone was candid but constructive: fiscal 2024 is expected to be pressured, but she repeatedly pointed to specific operational levers and said the company needs to prove execution.

Matt Schroeder anchored the quarter in the numbers: $128.6 million of adjusted EBITDA, $6.09 billion of revenue, and a $241.3 million net loss, including a $119 million non-cash goodwill impairment at Elixir. He said SG&A improved by $75 million on a comparable 13-week basis and noted operating cash of $266 million, helped by CMS receivable collection and lower inventory, while net debt ended around $2.8 billion with leverage at 6.5x and liquidity at roughly $1.5 billion. He also guided to $340 million-$370 million of adjusted EBITDA in fiscal 2024, about $225 million of capex, around $250 million of cash interest, and a likely slight free cash flow deficit, while saying the company may use sale-leasebacks and can flex capex if needed.

Analysts focused on how much of the quarter’s improvement was tied to COVID-related items versus underlying business health, and Schroeder said the company administered about 600,000 COVID vaccines, 500,000 flu shots, and sold 3.5 million antigen tests, with PCR testing essentially gone. Questions also centered on the turnaround ramp and Elixir demand: management said the $10 million of turnaround benefit came in Q4 and will grow significantly, while Elixir is seeing greater interest in selling season but remains early in the process. On litigation, Busy Burr said Rite Aid is vigorously defending itself, that costs are already reflected in guidance, and that timing remains hard to predict.