NEW YORK — Rite Aid Corp. reduced its full-year earnings forecast after it said lower reimbursement rates and higher costs for drugs hurt profit.
Net income for fiscal 2015 is expected to be 22 cents to 33 cents a share, the Camp Hill, Pennsylvania-based company said in a statement Thursday. The drugstore company previously forecast 30 cents to 40 cents.
“We do not have as much profitability from new generics than we’ve had in the past,” said Chief Executive Officer John Standley, on a conference call with analysts.
He partly blamed a delay in the arrival of a generic version of Nexium, AstraZeneca’s prescription antacid pill that sold $3.87 billion last year. A generic version of Nexium was supposed to go on sale in May, but has been delayed by regulatory issues with India’s Ranbaxy Laboratories.
The pharmacy chain has more than 4,500 stores and its revenue has grown as customers gained health insurance under the Patient Protection and Affordable Care Act, also known as Obamacare. Its peers, including Walgreen Co., have also struggled with projecting drug costs in their pharmacy businesses.
“We’re going to continue to have to work through the reimbursement rate environment that we’re in,” Standley said. “We’re going to have to be efficient; we’re going to continue to work on the purchasing side as hard as we can, pick away at this thing.”
Rite Aid Thursday also reported second-quarter profit that beat analyst estimates. Earnings were 13 cents a share in the three months ended Aug. 30, more than the 6-cent average of analyst estimates compiled by Bloomberg.
The company also reduced the top end of its full-year sales forecast, saying revenue was now expected to be $26 billion to $26.3 billion. Rite Aid in June had forecast revenue of as much as $26.5 billion.
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