(Reuters) - Drug retailer Rite Aid (RAD.N) on Wednesday posted smaller-than-expected quarterly revenue due to a fall in reimbursement rates and comparable-store sales.
The company’s shares plunged 12 percent to $1.86 after the bell.
The stock has fallen over 45 percent since June, when larger rival Walgreens Boots Alliance Inc (WBA.O) scrapped its deal to buy Rite Aid outright after failing to win antitrust approval.
Rite Aid, however, received regulatory approval in September to sell 1,932 of its stores to Walgreens for $4.38 billion.
“We have transferred 357 stores (to Walgreens) and have received about $715 million in proceeds, which we have used to pay down debt.” Rite Aid Chief Executive John Standley said in a statement on Wednesday.
The company said same-store sales fell 2.5 percent in the third quarter, dropping for the sixth straight quarter.
Rite Aid’s retail pharmacy sales dropped 3 percent, while pharmacy services revenue fell 12.2 percent as it participated in fewer regions offering Medicare Part D prescription drugs.
The company has been struggling with eroding profits in its pharmacy business, which sells prescription drugs, as increases in branded drug prices have slowed while reimbursement pressure for generics has intensified.
The number of prescriptions filled in same stores, adjusted to 30-day equivalents, decreased 2.4 percent, partly due to its exclusion from certain pharmacy networks, Rite Aid said.
The Camp Hill, Pennsylvania-based company’s total revenue fell 5.6 percent to $5.35 billion, much below analysts’ average estimate of $7.45 billion, according to Thomson Reuters I/B/E/S.
Excluding one-time items, Rite Aid broke even on a per-share basis, while analysts had expected a loss of 2 cents.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Maju Samuel