Rite Aid plans to shutter 63 of its stores as part of the first phase of a new store closure program, the Camp Hill-based pharmacy chain announced in its third quarter results for 2021.
The stores chosen for closure have yet to be named. The closures are expected to provide the company with an annual EBITDA benefit of $25 million.
“Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business,” said Heyward Donigan, president and CEO of Rite Aid.
Rite Aid expects to increase the number of store closures in the coming months as it continues to review its 2,488 retail pharmacy locations across 17 states. Employees impacted by the closures will be able to transfer to other stores.
In its third quarter results, Rite Aid reported $6.23 billion in revenues from continuing operations during the 13-week period ending Nov. 27—an increase from $6.12 billion during the same period last year.
The pharmacy chain noted in its report that the 1.8% increase was driven by growth within its retail pharmacy segment, partially offset by a decline in its pharmacy services segment.
The company reported a net loss from continuing operations of $36.1 million this quarter, a jump of 739% over the $4.3 million in the third quarter of 2020.
“The increase in net loss is due primarily to higher facility exit and impairment charges driven by the company’s store closure decisions,” Rite Aid wrote in its report. “Other variance drivers include a LIFO charge in the current quarter compared to a Last in, First Out (LIFO) credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in adjusted EBITDA and lower depreciation and amortization expense.”
Rite Aid announced in September that it will move its headquarters to Philadelphia early next year as it shifts to a focus on remote work.
As part of the move, Rite Aid plans to open “regional collaboration centers” across the country that will allow its teams to work together when needed. Rite Aid hasn’t announced where these hubs will be located but has confirmed that one will be in the midstate.