Rite Aid Withdraws 2021 Forecast Amid Pandemic Uncertainty

(Bloomberg) -- Rite Aid Corp. withdrew its fiscal year 2021 forecast on Thursday, citing an uncertain economy and concerns about a slow return to doctor’s offices and surgeries hindering prescription demand.

“There’s just such a wide range of outcomes here,” said Chief Financial Officer Matt Schroeder on a call discussing the company’s fiscal first-quarter results.

Other risks cited included possible shortages in certain generic drugs, a membership drop in its pharmacy benefit manager, and even the added costs for cleaning during the pandemic. Still, Rite Aid shares surged 20% Thursday morning after the company posted better-than-expected results from the fiscal first quarter of 2021, which ended May 30.

Chief Executive Officer Heyward Donigan said stimulus efforts will likely cushion the effects of an economic downturn. Still, she said, the company is considering how a long and deep economic contraction could affect its business.

“It’s still a risk I think we all have to be aware of,” Donigan said.

Possible opportunities for the company include higher demand than usual for flu shots this fall and continued expansion of its Covid-19 testing abilities. In the first three weeks of June, Rite Aid’s sales in the front of the store increased about 7%, excluding tobacco products.

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