Rite Aid’s Coronavirus Safety Costs Overshadow Big Jump In Sales

Rite Aid saw a big jump in overall sales as cases of the coronavirus strain Covid-19 surged this spring, but costs of protecting employees and customers hit profits in the drugstore chain’s first quarter, the company said Thursday.

Like other retail pharmacies, Rite Aid saw a surge of customers stocking up on medicines and personal care items early in the pandemic, but have also incurred additional expenses to keep employees and customers safe by hiring additional staff, intensifying store cleaning, sanitation and other measures.

Meanwhile, Rite Aid’s bottom line suffered thanks to a “reduction in acute scripts” as physician offices closed and elective surgeries were cancelled as hospitals paved the way for Covid-19 patients. Rite Aid said the total net impact of COVID-19 on its first quarter was “a headwind of $30 million.”

Rite Aid reported a fiscal first quarter operating loss of $72.7 million. Revenues jumped more than 12% to $6.03 billion to $5.37 billion in the prior year’s quarter.

“There are certainly challenges brought about by Covid-19, including the decline in acute prescriptions and increased costs incurred to assure the safety of our associates and customers,” Rite Aid chief executive office Heyward Donigan said. “No matter the challenge, we can execute our strategy and deliver day-to-day operational excellence in the face of a pandemic.”

Rite Aid has more than 2,400 stores in 18 states including Washington, California, New York and Pennsylvania where the virus spiked during the company’s fiscal first quarter, which ended May 30.

Rite Aid’s efforts to serve their customers amid the Coronavirus outbreak also come amid an effort to turnaround the drugstore chain and a coming rebrand of stores across the country by the end of the year.

Rite Aid and rival pharmacies owned by CVS Health, Walgreens and Walmart have been dedicating parking lots and other temporary areas outside of their drugstores across the country to test for the Coronavirus strain COVID-19. Rite Aid Thursday said it launched “97 sites with the capacity to conduct more than 48,000 tests each week.”