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Rite Aid Corporation (NYSE:RAD) Q4 2020 Antithesis Appointment Alarm April 16, 2020 8:30 AM ET

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Company Participants

Byron Purcell – VP of IR and Treasury

Heyward Donigan – CEO

Jim Peters – COO

Matt Schroeder – CFO

Dan Robson – President, EnvisionRxOptions

Conference Alarm Participants

Robert Jones – Goldman Sachs

Glen Santangelo – Guggenheim Securities

Lisa Gill – JPMorgan

Elizabeth Anderson – Evercore ISI

George Hill – Deutsche Bank

William Reuter – Bank of America

Karru Martinson – Jefferies

Bryan Hunt – Wells Fargo Securities

Operator

Ladies and gentlemen, acknowledge you for continuing by. My name is Carmen and I will be your appointment abettor today.

At this time, I would like to acceptable anybody to the Rite Aid Fourth Division 2020 Antithesis Appointment Call. [Operator Instructions] I would now like to about-face the appointment over to Byron Purcell, Head of Investor Relations. Please go ahead.

Byron Purcell

Thank you, and acceptable morning, everyone. We acceptable you to our budgetary 2020 fourth division antithesis appointment call. On the alarm with me today are Heyward Donigan, President and Chief Authoritative Officer; Jim Peters, Chief Operating Officer; Dan Robson, President of Elixir; and Matt Schroeder, Chief Banking Officer.

On today’s call, Heyward will accommodate anterior comments, and an amend on our acknowledgment to the COVID-19. Jim will accommodate an amend on the retail business. Dan will accommodate an amend on the pharmacy casework business. Matt will accommodate an amend on the fourth division after-effects and COVID-19 banking appulse and afresh we will booty questions.

As we mentioned in our release, we’re accouterment slides accompanying to the absolute we will be discussing today. These slides are provided on our website, www.riteaid.com beneath the Investor Relations advice tab. We will not be apropos to them in our remarks, but achievement you’ll acquisition them attainable as they abridge some of the key credibility fabricated on the call.

Before we start, I’d like to admonish you that today this appointment alarm includes assertive advanced statements. These advanced statements are presented in the ambience of assertive risks and uncertainties that can annual absolute after-effects to differ. These risks and uncertainties are declared in our columnist release, in Account 1A of our best contempo Anniversary Address on Form 10-K, and in added abstracts that we book or accouter to the Securities and Barter Commission.

Also, we will be application assertive non-GAAP measures in our absolution and in the accompanying slides. The analogue of the non-GAAP measures, forth with a adaptation of the accompanying GAAP admeasurement are declared in our columnist absolution and in the slides.

With these remarks, I’d like to now about-face it over to Heyward.

Heyward Donigan

Thanks, Byron, and acknowledgment to anybody for abutting us. And aback this is the aboriginal time we’ll be accomplishing the alarm all sitting in altered states in our homes buck with us. So we’re action to altercate our aftereffect for Q4 and the year in aloof a few moments. But accomplish no abnormality our top antecedence as a aggregation appropriate now is confined our communities, of advance our Rite Aid customers, our EnvisionRxOptions, employer and bloom plan audience during this aberrant COVID-19 crisis and I allegation say I accept over 30 years of acquaintance in the healthcare industry including ambidextrous with SAARS and the barbarian flu which I will never forget. But I don’t advanced any of us in healthcare has accomplished article like this. So it is new breadth for all of us and as a baton I’ve never been added appreciative than I am appropriate now of our Rite Aid team. Calm we’re absolutely alive about the alarm authoritative abiding that we can abide to serve our communities. And the accent of the accumulation alternation has never been added axiomatic and our administration centermost teams are accomplishing a acceptable job admitting the abundant adversity we accept accepting as abounding basic food as we would absolutely like to accept for our customers.

Despite that our teams are alive absolutely adamantine to ensure our shelves are abounding as bound as those articles are fabricated available. Our retail food assembly are alive calm to apparatus our added charwoman and amusing break procedures as they are accomplishing their aloof important accustomed work. So it’s absolutely assignment on top of work. And our pharmacy [indiscernible] dispensary teams are accomplishing the aforementioned and they’re additionally accouterment our barter with the medications, casework and affliction they allegation during this arduous time.

On added than 6,400 Rite Aid pharmacists are proving their role on the advanced ambit of healthcare is crucial. And this crisis has showcased their basic role in healthcare and as able-bodied has been the cornerstone of our go advanced strategy. And our acreage administration and accumulated aggregation including EnvisionRxOptions, Bloom Dialogue and RediClinic are alive endlessly to advice accumulate our assembly safe and accommodated our customer’s needs.

As a administration team, we abide to booty analytical accomplish to assure the assurance of our assembly and customers. We accept and will abide to abode masks for every advanced band accessory install Plexiglas at every retail breadth and accommodate Hero Pay, Hero Account and Communicable Pay programs.

We’re additionally alive carefully with the US Department of Bloom and Human Casework to aggrandize testing sites at our food aloft our pilot location, Philadelphia. And aloof aftermost week, the Rite Aid Foundation appear a $5 actor accession to abutment the nation’s healthcare providers and aboriginal responders to abutment children, families and communities impacted by this alpha to abode the geographic communicable hotspots, which is absolutely breadth Rite Aid food are located. We are abysmal in those communities, and additionally to abutment Rite Aid’s own assembly as they abide to action the COVID-19 communicable themselves abandoned in abounding cases. The added footfall that we’ve taken are accent in today’s columnist absolution and we will abide to do added as we affiliate calm in this advancing action adjoin an airy enemy.

I’m absolutely appreciative of the ballsy and amazing efforts of our team. And as a baton of the organization, my top antecedence is to booty affliction of our assembly as we angle attainable to serve our communities at a time aback they allegation us most.

So in axis to our after-effects for Q4, I’m additionally appropriately appreciative of our aggregation for continuing to bear able after-effects that accommodate a foundation for accomplishing our new cardinal objective. As a reminder, our fourth division concluded on February 29, which is afore the COVID-19 crisis absolutely began to accept a banking impact.

Later on today’s call, Matt will accommodate an amend about how COVID-19 has impacted our business and could appulse it action forward. In agreement of the quarter, we grew acquirement aloft both segments and delivered our added afterwards quarter-over-quarter advance in adapted EBITDA. In our Retail Pharmacy, we added aforementioned affluence sales in both the pharmacy and advanced end while breeding able calligraphy calculation growth.

For EnvisionRxOptions, which is anon to be renamed Elixir, we collection able acquirement advance by accretion our Medicare Allotment D assembly and grew adapted EBITDA through improvements in managing our pharmacy network. Overall, this was a able division for beheading that helps to accommodate us with the important drive branch forward. This division four achievement is an dispatch of the astute assignment we’ve been accomplishing throughout the budgetary year.

As we plan for the future, we additionally move with abundant coercion to about-face this aggregation about and activate growing again. So we congenital our new administration aggregation with top talent, a job that is still underway. We bargain costs at Rite Aid accumulated by [$65] [ph] actor on an anniversary run bulk basis. We affiliated 35% of our band adeptness out to 2025. We bargain our debt and bargain our advantage arrangement by added than a abounding turn.

We counterbalanced our retail business and [handled easy] [ph] our FY 2020 pharmacy plan. And we exhausted our [indiscernible] EBITDA affairs while additionally authoritative expense. As we said during analyst day all of this is important, actual important, but it won’t be abundant to get our aggregation thriving. As you apperceive we afresh presented our eyes for reintroducing Rite Aid in the communities we serve.

We are committed to redefining our industry by ablution a adventurous pharmacy aboriginal action that we alarm Rx evolution. This action focuses on acceptable the ascendant mid-market PBM unlocking the bulk of our pharmacists and abating our retail and agenda experience. As the COVID-19 crisis has unfolded, it’s abstract the accent of our go advanced affairs and the allegation for what we can and will action in the communities we serve.

Ironically it has able that pharmacists are amid the best trusted and attainable healthcare professionals and that we can empower our pharmacists to drive chump assurance to levels not apparent afore in healthcare. And it’s reminded us that the retail articles and casework we action are basic to the communities we serve.

So, we’re adamantine at assignment not abandoned in confined the actual needs of our communities, but additionally in blockage on advance with our ablaze eyes for the future. It’s absolutely a attestation to our team, which is alive absolutely about the alarm to serve the immense needs of our communities while affective advanced with our cardinal plan.

So at this time I’d like to acquaint Jim Peters for added updates on Q4 as able-bodied as our cardinal plan. Jim?

Jim Peters

Thank you, Heyward. I accept been annihilation abbreviate of aggressive by the absolutely amazing efforts of our organization, our associates, and abnormally our affluence and administration centermost associates. Rite Aid, we know, we’re not the abandoned ones aggressive this crisis appropriate now but I can assure you we are all easily on accouter to do our allotment and added to serve our assembly and communities during this actual arduous time.

It about seems atomic to be discussing banking after-effects during a time like this but like added action comestible businesses throughout the apple we additionally apperceive the accent of managing and active on the day to day business so that Rite Aid can abide confined our communities able-bodied aloft this crisis and for ancestors to come.

Fortunately our aggregation had already been active adjoin our new Rx change action as we admission budgetary Q4 which helped us bear a able division throughout key areas of our business. As you apperceive our pharmacy is at the affection with our new action which is advised to fundamentally change Rite Aid’s role in healthcare.

As we appear at Analyst Day consumers appointment Rite Aid food upwards of 25 times to 30 times per year. And we accept there’s a cogent befalling to advantage these alternation credibility to abutment consumers, bloom plans, and healthcare providers as a accurate accomplice a accomplice that helps adviser and reinforce a added affiliated affliction journey. As we abide alive to accompany this eyes to life, it’s ascendant that we abide architecture drive with our pharmacy business to lay the foundation for Rite Aid’s Rx evolution.

In the fourth quarter, we affiliated seeing able calligraphy calculation and analytic annual trends as we focus on accouterment an alike college akin of affliction and engagement. We delivered 5% advance in aforementioned affluence decree calculation adapted to 30 day equivalents apprenticed by able beheading conspicuously in growing immunizations and medication adherence through abandoned interventions, as able-bodied as decree book buys and accepting admission to new networks in markets breadth we accept able bazaar presence.

This year our pharmacy has added our cardinal of flu shots by added than 300,000 over the aftermost year, for a absolute of added than 2.6 million. We additionally decidedly grew accessory immunizations by added than 500,000 for the year which pushed our absolute cardinal of immunizations including flu to added than 4 actor and of advance we affiliated to appoint added barter through medication assay administration casework with our after-effects above both aftermost year and our plan for FY 2020. These absolute after-effects lay the background as we body a added able-bodied set of capabilities that supports a affiliated affliction acquaintance and accomplished actuality bloom solutions that accommodate prescriptions, articles and services.

As Heyward mentioned earlier, abating our retail and agenda acquaintance is key to accouterment a holistic affiliated acquaintance that consumers appetence and expect. On the retail ancillary in Q4, we delivered astute advanced end advance in a arduous environment, which is accouterment us with key go advanced drive in accession analytical breadth of our business.

Front end adverse and aback excluding cigarettes and tobacco advanced end aforementioned affluence sales grew by 1.5% with able after-effects and in bulk categories such as aerial respiratory affliction affliction and aboriginal aid. We additionally saw able advance its own cast assimilation which added 148 abject credibility to 20.69% division over quarter. Own brands will abide to be a analytical antecedence as we barrage added bigger for you items to accompaniment our focus on accomplished actuality health.

Heading advanced we abide to check and abbey our absolute commodity alternative to absolutely acclaim the animated bloom and wellness acquaintance that will differentiate Rite Aid from our competition. This new affairs will be phased into all Rite Aid food with our affluence of the approaching prototypes demography it to an alike college akin as we able with originally barrage our new cast in the fall.

Speaking of our new brand, aftermost ages we apparent our new Rite Aid logo and cast character and we’re aflame to be alive appear our academic barrage this fall. As noted, we conducted all-encompassing quantitative and qualitative assay to advance a alpha and fun cast that resonates with the new ambition advance consumer, millennial and GenX women who affliction for multigenerational households including pets.

As we assignment adjoin delighting these consumers, we’re demography accelerated accomplish to decidedly enhance our agenda experience. Beforehand this anniversary afterwards months of research, development and testing we bendable launched our new website and adaptable app with an absolutely new attending and feel and an added chump experience. These new accoutrement affection automatic navigation, added cellophane rewards and adherence allowances and added user affable online arcade cart, decree reminders for agenda pharmacy accounts and more.

We’ll activate announcement this new armpit and app to consumers in aloof a few weeks and both will assuredly comedy a key role in creating a added abandoned experience, acquaintance that are seamlessly affiliated to our all blow points. This barrage is of advance not a barrage and done but rather an aboriginal footfall in a agenda adventure that positions us to leapfrog our antagonism in carrying an omni-channel acquaintance never afore apparent in the retail pharmacy segment.

In Q4 our agenda sales grew by 28% apprenticed by agenda refills and we are focused on active affiliated advance branch forward. And in ablaze of the accepted ambiance it’s aces to accent that we abide to strengthen our e-commerce capabilities to advance the advance we’re already seeing.

We’ve fabricated adventurous moves in band with our action to admission up chump acquaintance in e-commerce and COVID-19 accelerated the timeline for architecture these capabilities. And solid beheading on our action above-mentioned to COVID-19 positioned as able-bodied to action through our aberrant online demands spike. For archetype we were already transitioning to a anatomy that treats e-commerce as a business not a bulk center.

We had already recruited the baton who now runs this e-commerce business and all-embracing chump acquaintance and administrator and agenda retail authoritative who letters anon to me. And while it’s a accustomed that we accept been aggressive through aberrant online adjustment volumes, our bodies accept responded able-bodied and with coercion and with strength.

We are a adulate and decidedly added active aggregation than aback I came actuality aloof six months ago. And as the active aggregation we’ve been abbreviate adjustment ramped up e-commerce fulfillment. We’ve added accommodation in our e-commerce administration centers, added workstations, assassin added people, added technology bandwidth.

We’ve developed what feels like years’ annual of months and are alive adamantine to accompany bottomward our excess and authoritative progress. And through all this we’ve handled this appeal and advance responsibly. In accession to accessory assurance measures we’ve allowable affluence limits, bargain attainable assortments and acutely admonish barter to the best of our adeptness a prolong abode types.

As I said beforehand our agenda transformation will advice ammunition and drag an omni-channel experience, both in affluence and online, which is taken on in alike college akin of accent in ablaze of the COVID-19 crisis. We accept broadcast self-checkouts at the 260 food with affairs for an added 400 locations in FY 2021. Our decree commitment and drive through capabilities abide to be allusive options for our customers, abnormally during this crisis.

We afresh broadcast our pilot with Instacart, and abide to analyze added acceptable commitment options for our consumers purchasing commodity from our stores. In addition, we afresh completed a acknowledged adeptness to pay and go to accelerate decree aces up both in-store and at the drive through. We are now in the action of accretion this annual aloft our affluence cast with an accepted achievement date of April 30. And we abide to accompany new capabilities for consumers to buy online aces up in store.

All of this is arch to a astute chump acquaintance throughout all stores, decidedly in affluence – in our affluence of the future. By default, all Rite Aid food will affection improvements such as exoteric apple-pie up, new signage, affairs changes, active and caps and breadth bare Gondola changes. And for our affluence of the future, we will accommodate our alms through appearance like wellness rooms, which will bear localized all-being bloom solutions in a staggered chargeless environment.

Before I about-face it over, I’m aflame to abide our Rx change and we will abide blame advanced to accompany this eyes to life. At the aforementioned time, our top antecedence is arch and acknowledging our teams, so that we can accumulate our assembly safe, advantageous and attainable to serve the barter in our communities. I’d like to aboveboard acknowledge our added than 50,000 Rite Aid assembly for aggregate they aggregate they do day in, day out. They abide to acknowledge in ballsy agency and are authoritative abiding that we can abide accouterment basic affliction casework and articles during this never afore aforementioned time.

Thank you and now I’d like to about-face it over to Dan Robson, for an amend on the Elixir. Dan?

Dan Robson

Thanks Jim. I’ve served as President of EnvisionRxOptions and as Heyward mentioned anon to be Elixir for four months now. Our approaching continues to attending bright. But afore we allocution about our key initiatives, I advanced it’s important to acknowledgment both the actual and approaching challenges presented by COVID 19. In commendations to our business continuity, the business, the aggregation bound implemented our communicable acknowledgment plan and I am appreciative to address that we encountered about no disruption to circadian operations. The aggregation has absolutely stepped up.

Moving advanced we will abide to accumulate a abutting eye on assembly abnormally our bartering employer business. We accept yet to see a assessable abatement that may change as audience are faced with bread-and-butter decisions apropos the admeasurement of their workforce. As we all apperceive it’s a arduous time for the country. And I’ll now aback to our key initiatives.

With anniversary casual anniversary we accomplish solid advance appear our objectives. Aboriginal and foremost, we abide to body out our administration aggregation and afterwards months of recruiting and vetting candidates, I am blessed to address that our authoritative agenda is all but complete. We accept abundant assignment to do in the advancing months and a acclimatized advanced cerebration administration aggregation will booty us bottomward the appropriate path.

As we talked about aftermost ages affiliation with the Elixir and amid Elixir and Rite Aid is a aloft action for 2020. We’ve completed a absolute assay of absolute authoritative structures and we are already demography accomplish to annihilate operational back-up and accidental expense. Throughout 2020, we will abutting the operational gaps amid the Elixir companies and accomplish tighter alignment with our ancestor aggregation Rite Aid.

We’re affective abounding beef advanced with cardinal investments in our technology infrastructure, artefact addition as able-bodied as affiliate experience. These initiatives will analyze our bulk hypothesis to ambition markets and acquiesce us to barrage a added cohesive, added focused bazaar action as we cycle into Q2. And finally, we are adamantine at assignment advancing to apparatus our new name cast Elixir. We will run it. We run a circuitous business and a rollout like this takes time. Our plan is to complete this rollout in 2020.

Now apropos fourth division performance, the Elixir aggregation did a abundant job of carrying advance during a time of cogent change. Fourth division after-effects were able with an adapted EBITDA accretion by $12.6 actor or 33.2% compared to the fourth division of the above-mentioned year. This admission was primarily apprenticed by affiliated focus on convalescent allowance including our cogent efforts to optimize our arrangement strategy.

Revenue was favorable to above-mentioned year by $337.8 actor or 23.1%. This admission in acquirement was primarily due to an admission of Medicare Allotment D membership. Medicare Allotment D acceptance is up 39.2% year-over-year with a absolute year-over-year admission of about 244,000 members.

In summary, we now accept over 860,000 Medicare Allotment D assembly including over 450,000 choosers. Additionally at our Elixir Pharmacy specialty revenues are up 20.2% year-over-year and Medicare revenues were up 27.1% year-over-year. Finally, the 2020 bartering affairs division was able accepting bankrupt over 300,000 new lives, which about three abode are bloom plan lives.

We’ve additionally anchored renewals for abounding of our key audience and alike with some losses that we accede outliers our assembly assimilation bulk is 90%. Our position has a able absolute mid-market PBM is resonating as an basic advantage in the barter for bloom plans, bloom systems, self-insured employers, and unions.

We accept a able action for the 2021 bartering and 2022 bloom plan affairs division and at the aforementioned time there may be audience in this action who are absorbed to break with our bounden PBM in this environment. However if this happens that would additionally beggarly that Elixir would accept a college assimilation rate.

Now, with that, I’ll about-face it over to Matt for some comments on Q4 banking performance. Matt?

Matt Schroeder

Thanks, Dan. On this morning’s call, I will airing through our fourth division results, accommodate an amend on the contempo impacts of COVID-19 on our business and analysis our budgetary 2021 guidance. Revenues for the division were $5.7 billion which about about $348 actor from the above-mentioned year’s fourth quarter.

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Net accident for the division was $343.5 billion or $6.43 per adulterated allotment compared to $255.6 actor or $4.83 per adulterated allotment in the aftermost year’s fourth quarter. The admission in our net accident is due mostly to college assets tax bulk partially annual by a $72.4 actor LIFO acclaim in the accepted year compared to a LIFO allegation of $4 actor in the above-mentioned year.

Income tax bulk was abnormally impacted by $320.6 actor allegation apropos to an admission in the appraisal allowance adjoin our net deferred tax asset. The admission to the appraisal allowance was based on our best contempo appraisal that it is added acceptable than not, that acceptable taxable assets will not be generated to apprehend the annual of the net deferred tax asset.

Adjusted net accident in the accepted division was $19.9 actor or $0.37 per adulterated allotment against adapted net accident of $13.3 actor or $0.25 per adulterated allotment in the prior-year quarter. The admission in our adapted net accident was due primarily to a accepted year accident and the auction of our 2019 CMS receivable compared to a accretion on auction of assets in the prior-year fourth quarter. This is partially annual by an admission in adapted EBITDA which was $135.6 actor in the accepted division compared to $134.1 actor in the prior-year quarter.

Retail pharmacy articulation acquirement for the division was $4 billion, which was $22 actor college than the aftermost year’s fourth quarter. Our admission in retail pharmacy articulation acquirement was apprenticed by an admission in same-store sales, partially annual by a abridgement in affluence calculation aback the end of budgetary 2019. Same-store sales added to 160 abject credibility in the quarter.

Front-end same-store sales were up 150 abject credibility afterwards excluding cigarette and tobacco sales, apprenticed by able after-effects in bulk categories such as aerial respiratory, affliction care, and Aboriginal Aid. Pharmacy aforementioned affluence sales added by 160 abject credibility with aforementioned affluence decree calculation of 5% on a 30 day adapted abject due to able beheading conspicuously in growing immunizations and medication adherence through abandoned interventions as able-bodied as decree book buys and accepting admission to new networks to markets breadth we accept able bazaar presence.

Total retail pharmacy gross accumulation dollars in the division were $83 actor bigger than aftermost year’s fourth division and gross allowance was a 193 abject credibility bigger as a percent of revenues. Retail pharmacy articulation gross accumulation for the fourth division includes the LIFO acclaim I mentioned beforehand which resulted from anticlimax and all-encompassing biologic bulk partially annual by cast biologic inflation.

Adjusted EBITDA gross accumulation was favorable to aftermost year’s fourth division by $1.5 actor and a 11 abject credibility worse than above-mentioned year as a percent of revenues. Our accretion adapted EBITDA gross accumulation was apprenticed by an advance in pharmacy gross accumulation due to decree advance partially annual by lower agreement rates.

The advance in pharmacy gross accumulation was partially annual by lower advanced end gross accumulation due to a abatement in bell-ringer promotional allowances. Retail pharmacy articulation SG&A bulk for the division was $5 actor college and collapsed as a percent of revenues to aftermost year’s fourth quarter. Our adapted EBITDA SG&A was $12.6 actor and 17 abject credibility worse than aftermost year. The admission in adapted EBITDA SG&A was apprenticed primarily by bargain TSA fee assets from Walgreens.

Our pharmacy casework articulation Elixir had revenues of $1.8 billion which was an admission of $338 actor or 23% due to an admission in our Medicate Allotment D revenues as we abide to abound our membership. Adapted EBITDA for the Pharmacy Casework articulation of $50.4 actor was $12.6 actor bigger than aftermost year’s fourth division adapted EBITDA Pharmacy Casework articulation adapted EBITDA benefited from added revenues and improvements in pharmacy arrangement management, partially annual by increases in SG&A bulk accompanying to our advance in Medicare Allotment D lives.

Our banknote breeze annual for the division shows a antecedent of banknote from operating activities of $417 actor in the accepted year division compared to a use of banknote from operating activities of $216 actor in the above-mentioned year quarter. The banknote from operating activities in the division benefited from the auction of our agenda year 2019 Medicare Allotment D receivable from CMS and the aftereffect of initiatives to abate front-end inventory.

Our debt antithesis net of banknote was about $2.8 billion at the end of our fourth division and our pro forma advantage arrangement is 5.3 times adapted EBITDA, which takes into annual the appulse of gain from the auction of the actual administration centermost to Walgreens, which is accepted to be completed consecutive to year-end.

As advanced announced, during the quarter, we completed an barter of $600 actor of our 608% addendum to April 2023 to 7.5% added affirmation anchored addendum due July of 2025, which improves our debt adeptness profile. Our clamminess of $2 billion at division end is actual able and with no debt crumbling until 2023 we had the adaptability and aerodrome to assassinate our cardinal initiatives.

Before discussing our advice for budgetary 2021, let me absorb a few account accouterment an amend on how COVID-19 has impacted our business through the aboriginal several weeks of budgetary 2021. We saw a cogent admission in revenues during the ages of Advance with same-store frontend sales accretion by 33%. These increases were impacted by appeal for accepted charwoman products, sanitizers, wipes, cardboard articles and OTC items. The appeal has chastened in the aboriginal few weeks of April.

Same-store for calligraphy counts are 8.3% for the ages of Advance apprenticed by the dispatch of 90 canicule fills of aliment prescriptions. We appearance this as a timing account and apprehend this abnormality to accept a abrogating appulse on calligraphy trends in April and May. There is additionally a accident that adjournment in constituent medical procedures could accept a abrogating concise appulse on astute prescriptions sales.

The annual that we accept apparent from added sales has been abundantly annual by investments fabricated accompanying COVID-19 that Hayward declared beforehand including pay adjustments for affluence and administration centermost alternate associates, bonuses for affluence managers and pharmacists, added accuse to apple-pie food and added bulk increases in accompanying to our added aggregate such as accumulation costs and acclaim and debit agenda fees.

Regarding accumulation chain, our accepted accumulation for the majority of our branded and all-encompassing drugs is good. However, we’ve apparent added appeal for assertive all-encompassing articles such as inhalers and hydroxychloroquine and are carefully ecology the accumulation of these and added all-encompassing products.

We’ve had issues in restocking of our front-end articles with abundant appeal agnate to others in the industry. We’re alive agilely with our supplier ally to get aback inside. At Elixir, we’ve apparent an admission in mail adjustment prescriptions and biologic appliance which has a favorable appulse on the business. Offsetting this is a abrogating appulse of college appliance on our medical accident arrangement at Invision Insurance, our Medicare Allotment D plan.

So far we accept not apparent any abrogating changes in absolute assembly for our PBM clients. However, there is a accident that affiliated layoffs could abnormally appulse PBM assembly and accompanying gross allowance and we will abide to adviser this closely. Our banknote and clamminess position is actual strong.

The accepted clamminess is $1.9 billion with a slight abatement from the $2 billion dollars at year end due to accepted timing differences of receipts and payments. We’ve had no affair accessing our revolving acclaim adeptness and out of an affluence of attention accept fatigued an added $180 actor on our revolving acclaim adeptness to captivation banknote during these ambiguous times.

At this time, the aggregation does not accept abundant advice about the ultimate appulse of Covid-19 on budgetary 2021 after-effects to absolve alteration the budgetary 2021 advice that we issued on Advance 16 during our Analyst Day presentation. It is important to agenda that the impacts of Covid-19 on our business are aqueous and difficult to adumbrate and these estimates could materially change.

Factors that could annual our estimates for budgetary 2021 to materially change accommodate a abasement in front-end sales and prescriptions due to prolong amusing absolution measures, a abridgement in assembly at a Pharmacy Casework segment, bartering clients, and disruptions to our front-end or biologic accumulation chain. Our advice assumptions for the retail pharmacy articulation reflect expectations for affiliated decree calculation advance and affiliated agreement bulk pressure, partially annual by all-encompassing biologic bulk accumulation and able SG&A bulk control.

Our advice for the Pharmacy Casework articulation assumes abiding improvements in pharmacy arrangement administration and allowances from SG&A abridgement and added affiliation activities and bulk abridgement initiatives. Our advice additionally assumes restructuring accuse of about $60 actor which are not included in adapted EBITDA. These accuse accommodate the estimated bulk to re-launch the Rite Aid and Elixir brands as able-bodied as transitioning assertive commodity ambit in the retail stores.

We apprehend absolute revenues to be amid $22.5 billion and $22.9 billion including PBM revenues of $6.75 billion to $6.85 billion. We apprehend same-store sales to be in a ambit of an admission of 1.5% to 2.5%. We apprehend net accident to be amid $91 actor and $190 actor and accepted adapted EBITDA to be amid $500 actor and $540 million. We accepted adapted net assets per allotment to be amid a accident of $0.22 and assets of $0.19 per share.

Our budgetary 2021 basic expenditures are accepted to be $350 million. It will be concentrated on investments and technology. Our affluence rebranding initiatives and decree book buys that will drive growth. There is a accident that restrictions on architecture action and closures of bounded authoritative allowing offices could adjournment our affairs to cycle out new sites to our food and could appulse the cardinal of food in the approaching remodels that we accomplish in budgetary 2021. However it’s too aboriginal to amend our advice for basic expenditures.

This completes my allocation of the presentation. And with that, we will now be aperture the buzz ambit for your questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] So our aboriginal catechism will appear from the band of Robert Jones with Goldman Sachs. Please go advanced with your questions.

Robert Jones

Great. Thanks. Acknowledgment for demography the questions. You apperceive Matt, you aloof talked about some of the backbone you saw in Advance in both advanced end and scripts. But I was acquisitive you could allotment maybe a little bit added with us on the blazon of comps that you’re celebratory in the added contempo weeks end of advance into the aboriginal brace of weeks in April, I apperceive you mentioned it moderating. But is there any added of a faculty you can accord us on the adjustment of consequence as far as what you saw in the way of a bead off as it relates to consumers alteration behavior in the contempo weeks?

Matt Schroeder

Yeah. Yeah. Apparently I can’t accord you a absolute numbers Bob, but what I would acquaint you is we are still seeing absolute advanced end atone trends, absolute trends on the advanced end and on the scripts that we are seeing in the aftermost brace of weeks hardly abrogating trends as we see affectionate of the appulse of that 90 – accelerated 90 day ample affectionate of appear back.

Heyward Donigan

Well, additionally lower astute medication because bodies aren’t absolutely action to the doctor appropriate now.

Matt Schroeder

Yeah.

Robert Jones

No, that’s helpful. And afresh I assumption as it relates to the comments you fabricated about all-encompassing biologic purchasing accumulation not offsetting the accepted agreement decline. Could you accord us any added detail here, are you seeing college than accepted all-encompassing appraisement than what you had advanced advancing And I guess, if that is the case, could you maybe advice us advanced through what’s causing that? How the disruptions in the arrangement adeptness be consistent in alteration in the all-encompassing appraisement market.

Matt Schroeder

Yeah, Bob, as you analyze that absolutely the comments about all-encompassing biologic bulk not absolutely offsetting agreement bulk pressures are absolutely in the ambience of aback we initially set our advice and aloof our expectations that we’re action to accept agreement bulk reductions in budgetary 2021 that are aloft and aloft the accumulation we would apprehend to get aloof in affectionate of accepted bazaar conditions, I advanced it’s too aboriginal to absolutely actuate whether or not annihilation with COVID-19 is action to accept an appulse on all-encompassing pricing.

Robert Jones

Great. I assumption aloof one aftermost aftereffect if I could. Heyward, you mentioned the abnormality in astute and chronic. It’s article that we’ve been accepting questions on. I mean, is there any added you can allotment there aloof as far as the trends you’re seeing if you parsed out association accepting abiding medications against astute in both the pharmacy and additionally at the PBM?

Heyward Donigan

Yeah. Well, absolutely this has been – we’ve apparent a huge uptick in the PBM in agreement of mail-order for sure. And we’re seeing bodies of course, stocking up on their 90-day medication because they don’t absolutely appetence to be action aback to the pharmacies as abundant because they’re aloof afraid about the closure. So if they can get 90 canicule in one cruise through a drive through that’s the alarming and afresh bodies aren’t – doctors aren’t accessible for business appropriate now, there’s been a 40% I advanced abatement in primary affliction physicians business.

And so bodies don’t appetence to go to the emergency allowance appropriate now. And so we are adage what I accept is the acting abatement in astute affliction meds, I advanced this will aces up in ardent aback markets alpha to accessible and Tele Bloom absolutely alpha to see its abounding impact. So my appearance is this is potentially aloof temporary. So aliment medications do accomplish up the majority of the scripts that we fill.

Robert Jones

Okay. Great.

Matt Schroeder

Bob, I would aloof add to what Heyward said and aloof accord you aloof a abstracts point. You apperceive in Advance abandoned we’ve apparent about an 8.3% admission in 30-day atone adapted calligraphy calculation for those aliment meds led absolutely by anti-asthmatics, cardiovascular, hyperglycemic medications. So that aloof does accord the abstracts point, we don’t await on that abundant because it’s a abbreviate window of time but at atomic directionally gives you a faculty of the driver.

Robert Jones

Appreciate that. Acknowledge you.

Operator

Your abutting catechism comes from the band of Glen Santangelo with Guggenheim. Please go advanced with your question.

Glen Santangelo

Oh. Yeah. Acknowledgment for demography my question. I aloof capital to chase up bound on Bob’s catechism apropos April. If I heard you accurately it affectionate of sounds like that alike in the accepted ambiance your advanced affluence sales are still trending absolute and I advanced you seemed to advance that scripts may be bottomward a little bit but that is due to an accelerated acceptance of 90-day scripts maybe affectionate of implying that the accepted bottom cartage is not bottomward materially year-over-year admitting the amusing break guidelines. Is that a actual characterization?

Dan Robson

Maybe, this is Dan. Maybe I can booty that one. So bottom cartage you apperceive it’s absorbing the way we ascertain it has changed. Right. So online cartage accumulated with in-store cartage is altered from aloof acceptable in-store traffic. So we’ve apparent trips bargain because of amusing break but we’ve apparent bassinet admeasurement increased.

So on the advanced end you see — you’ve got the stockpiling aftereffect aboriginal on. But as Matt adumbrated or adumbrated beforehand you apperceive while we’re not seeing the aggressive advance that we saw end of February alpha of March, we’re still at levels that are absolutely outpacing year-over-year on the advanced end.

Glen Santangelo

Okay. Thanks. And maybe if I aloof ask Matt a quick chase up on the antithesis sheet, a fair bulk of debt restructuring over the accomplished scattering of months, I’m affectionate of analytical is there added to go there and how do you advanced about the changes in the crop ambit in the acclaim markets and how that may appulse any array of antithesis area restructuring action forward?

Matt Schroeder

Yeah, absolutely there’s added assignment to do, Glen, and we still – and we’ve fabricated a lot of advance in our 2023 maturities but we still accept a ample band adeptness due in 2023 that that’s action to be top of apperception for us as we move throughout the year. I advanced acutely what this disruption in the acclaim markets over the aftermost month, I advanced we’ve affectionate of taken a abeyance in some of our activities but absolutely cerebration adamantine about how we handle those 23 maturities and I advanced as the bazaar stabilize, we would appetence to try to handle that adeptness eventually rather than later.

Glen Santangelo

Could the lower ante be a annual to you obviously?

Matt Schroeder

I advanced lower ante could, I advanced some of it depends absolutely candidly on what’s the appetence for our acclaim against like against advance brand credit. I advanced initially in mid-to-late Advance you apperceive the markets apparently were about abutting for a acclaim contour like ours. But my assumption is that’s starting to change in contempo weeks. We’ll booty a harder attending at it, already we affectionate of let us – let things achieve bottomward here.

Glen Santangelo

Okay. Acknowledgment for the comments.

Operator

Your abutting catechism is from the band of Lisa Gill with JPMorgan. Please go advanced with your question.

Lisa Gill

Thanks actual much. And acknowledge you. Matt, I aloof absolutely appetence to alpha with your advice for 2021 and the apprehension about how this all plays out too. So, in the accepted advice are you attractive at what you’re seeing currently and adage accept we advanced things are action to get better. Are you attractive at this and adage you lived through what happened aback in 2008 to 2010 with the bread-and-butter abatement acutely Rite Aid was in a absolutely altered position than they are today from a clamminess standpoint. But are you authoritative assumptions aural that advice that we do see added of a abiding bread-and-butter abatement and attending at what the abeyant appulse to your business could be it – I aloof appetence to accept affectionate of some of the puts and takes. I apperceive we’ve talked about it on about a ages ago at the Analyst Day. But I aloof appetence to bigger accept how you’re cerebration about an bread-and-butter downturn?

Matt Schroeder

You apperceive Lisa, I advanced there is a lot of agency this could comedy out. I advanced from the – one affair I advanced we try to be accurate about in our accent about advice is you apperceive accustomed what we see and apperceive today there wasn’t a acumen for us to change the guidance. I still advanced there’s a ton of ambiguity that could appear from COVID 19 and I advanced we’re actuality appealing accurate to try to let investors apperceive that there is that that ambiguity out there.

So I advanced in the accomplished recessionary environments what I would acquaint you is that we would see some burden on advanced end comps, you see scripts break about abiding on the PBM ancillary which we didn’t accept aback in 2008. I advanced there’s the accident of accident of bartering assembly somewhat annual by apparently a abeyant for increases in Medicaid assembly and we do accept a ample bulk of Medicaid lives.

I advanced from a advice standpoint we’ve approved to booty a snapshot of what’s our best appraisal of breadth things angle today. But afresh I advanced there’s aloof a ton of amorphous accident actuality of COVID 19 and we approved to be appealing affectionate of aboveboard about that in our release.

Lisa Gill

That’s helpful. And afresh aloof in an different question, you talked a little bit about telehealth and talked about the abeyant appulse from telehealth, two things I aloof appetence to accept one is it a telehealth accord with that you accept with an alfresco bell-ringer and if so can you allotment with us who that is?

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And afresh secondly, I advanced it may accept been either Jim or Heyward that fabricated the animadversion about abeyant approaching opportunities with telehealth and decree volume. What accept you apparent appropriately far with bodies utilizing telehealth? Are they afresh in about-face accepting a decree abounding at Rite Aid or are they advancing through the drive-through or they accepting it delivered to their home in some way? I aloof appetence to accept how you advanced about the approaching trends of telemedicine as I accept that that trend is actuality to stay?

Heyward Donigan

Yeah, I would like to animadversion on that. But I do appetence to aloof say that I advanced it’s a bit aboriginal to apperceive how telehealth is action to reflect out into the medications into the food alike admitting there has been telehealth action in the past. I advanced we’re I advanced that’s article that’s about to hit us. Jim, you appetence to allocution about our all-embracing strategy.

Jim Peters

Yeah, sure. Thanks. Hi, Lisa. Yes, the telehealth absolutely I additionally accept will booty a decidedly added role as we move forward. And I advanced for all the accessible affidavit this COVID-19 crisis has pushed regulators and others to affectionate of aggrandize their appearance of what pharmacists and assistant practitioners affliction to be able to do through telehealth. It is too aboriginal to tell.

All I could say is that we took all of our assistant practitioners and we’re aboriginal in sending them home as against to accepting them about be magnets for ailing bodies advancing into our food and as we did that we actual rapidly stood up our own attainable dispensary at home line, which is telehealth and we’ve done that with the accepted technology accomplice which is Teladoc.

And we accept had we’ve had a technology accord with InTouch which was afresh acquired by Teladoc. And so you apperceive application that technology and others that we use to acquiesce our own assistant practitioners to from the comforts of their own home and bluntly for patients the comforts of their own homes be able to affix and you apperceive we don’t see any abnormality as it relates to percent of those visits that aftereffect in scripts, but for us it’s aboriginal canicule for telehealth and we abandoned apprehend it to become a abundant stronger in allotment of our offering.

Lisa Gill

Great. Acknowledgment actual much.

Operator

Your abutting catechism is from the band of Elizabeth Anderson with Evercore. Please go advanced with your question.

Elizabeth Anderson

Hi, guys. Acceptable morning. I got two array of accessory questions. Can you allocution about the PBM pharmacy arrangement administration advance that you guys saw in the quarter?

Heyward Donigan

Matt?

Matt Schroeder

Yeah, Elizabeth this is Matt. I advanced what we’ve apparent is we’ve aloof been able to do a bigger job of affectionate of managing the antithesis amid the acknowledged commitments that we accept on our audience and affectionate of how we administer ante on the on the retail side.

Elizabeth Anderson

Okay. That’s helpful. And one of the things you’ve been adage is that pharmacists accept been accustomed to accord COVID test. Is that article that you guys are array of advertent for alive on your end?

Matt Schroeder

Well we’re actual abundant into that appropriate now. We’ve been a allotment of the White House assignment force on this. Jim Dan do you appetence to accord us an update?

Heyward Donigan

Yeah, absolutely. We’re alive anon or accept been alive anon with the White House and HHS on establishing testing sites. We appearance ourselves as a affectionate of pilot accomplice a key pilot accomplice to the government as they attack to cycle out a scalable archetypal of testing.

So we were allotment of the antecedent testing site. So, we had a breadth in Philadelphia. This anniversary we adapted our aboriginal Philadelphia armpit and opened up an added three sites in Pennsylvania application the new self-testing model. We accept partnered with a cardinal of vendors to accommodate it and testing led by our pharmacists and our ambition as allotment of the added beachcomber of government-driven testing is to angle up 25 of these sites in eight states and I advanced as chiefly is all of what we accept done, I would say that conceivably the best substantial, I think, movement that we’ve apparent as a aftereffect of Covid is Rite Aid actuality absolutely at the table in action abstraction discussions that advance to things like amplification of our adeptness — pharmacist’s adeptness to test.

Matt Schroeder

Noting out the cachet that in some states we absolutely do flu and strep tests and in those states we’re absolutely able to appoint as well. So, we do see and are absolutely aggravating to apostle for pharmacists to be able to abide to be an addendum of annual commitment accustomed their astute bulk of chump engagement. We advanced that there’s added casework that we can accommodate in our retail pharmacy.

Elizabeth Anderson

Got it. Acknowledge you.

Operator

Your abutting catechism is from the band of George Hill with Deutsche Bank. Please go advanced with your question.

George Hill

Yeah. Acceptable morning, guys, and acknowledgment for demography the questions. I assumption my aboriginal is a little bit of a aftereffect on Bob’s catechism apropos the all-encompassing biologic appraisement comments and I assumption is the – is what we should apprehend amid the ambit there is that best of the gross allowance burden that comes from agreement will not accept offset, so we should aloof advanced of the agreement burden abounding all the way to the gross allowance line?

Heyward Donigan

Yeah. George…

George Hill

Kind of a clay question, of course.

Heyward Donigan

I advanced best as a able word, I advanced we’ll be able to annual some of the agreement bulk burden with all-encompassing biologic savings, but absolutely we won’t be able to annual all of it.

George Hill

Okay. That’s helpful. And afresh maybe aloof talking about business mix, I assumption can you accommodate any blush on the bulk to which you guys over abject to Medicaid now. And I assumption I would ask at what point does that mix allegation to about-face to put the advice for the year at accident or I advanced best of us are assured to see a aciculate admission affectionate of as we go through the years as it relates to the Medicaid acceptance against bartering in the next?

Heyward Donigan

Yeah. Let me animadversion on that. So this is for the PBM business and our TGM business is a admixture of what we aforetime alleged net clue and what we formally alleged advanced now all one PBM alleged Elixir. And I advanced we’re actual advantageous that we accept a cogent bulk of bloom plan business is in the Medicaid business as able-bodied as we accept a cogent Medicare Advantage business forth with our Medicare Allotment D business and of advance bartering business which is heavily in that adjoin accessible area and action as able-bodied as baby accumulation business and so we feel that we accept as abundant of an befalling for upside as we do accept some accident on the bartering baby accumulation business aloof accustomed the economy. So I don’t apperceive if that answers your question, but we do advanced that the Medicaid rules will expand.

George Hill

Well, Heyward that’s abundant color. I was absolutely cerebration about it from the retail ancillary bold that your allowance decree in bartering was bigger than your allowance decree in Medicaid, so cerebration about the pharmacy payer is?

Heyward Donigan

Sure. I’ll let Matt acknowledgment that.

Matt Schroeder

Yeah. So we’ve apparently already over abject a little bit to Medicare compared to our competitors George has accustomed the markets that we are in and absolutely I advanced there is apparently some accident that mix could added over to a admeasurement that that you get bodies who are advancing or accepting laid off or accept admission to bartering allowance and now are demography advantage of Medicare Medicaid amplification or ACA. I assumption so I would say that while Medicaid scripts are beneath allowance than bartering that gap is maybe not as abundant as you would advanced on an all-embracing basis.

George Hill

Okay, that’s helpful. Acknowledge you.

Operator

Your abutting catechism is from the band of William Reuter with BoA Securities.

William Reuter

Good morning, guys. I was apprehensive if you were seeing any shortages in agreement of pharmacist and some are acutely adverse a lot with bodies and I was apprehensive if there were any challenges there in agreement of befitting them healthy.

Heyward Donigan

Well, actually, I couldn’t be added afraid and appreciative of our Pharmacy Retail. Our pharmacists accept lower callout ante appropriate now than they’ve anytime had. So these association are – they’re there on the ground. They’re accomplishing what they were aggravating to do and added chiefly what the purpose and mission of what they appetence to do. We accept had aloof an amazing acknowledgment from our pharmacy teams. They’re the ones that are additionally complex with our analytic teams accomplishing the testing. We accept had not abandoned no issues. We’ve apparent them appearance up like never before.

Now, I will say that in accepted we are in New York City. We’re in California. We’re in Washington. We’re in Pennsylvania. We are in the nation’s hotspot. And we accept been impacted mostly on the tech end front-end ancillary in agreement of quarantines and call-outs but we accept not had to abutting any food for annihilation added than cleaning. So it’s been appealing remarkable.

William Reuter

That’s abundant to hear. And afresh with attention to the Elixir you’re commercialized. You mentioned you’ve added 300,000 gross lives. Sounds like you’re action to lose some. Do you apperceive what you apprehend that cardinal to be for the 2020 season?

Heyward Donigan

Matt, do you appetence to comment?

Matt Schroeder

Yeah I advanced for basically for budgetary 2021 so for the division that has already been done I advanced commercials are action to be aback you booty the lives that we’ve gotten against the losses of recycling commercials apparently about flat. And I would apprehend best of the advance for agenda 2020, budgetary 2021 to be in mid D.

William Reuter

Great. I’ll about-face it to others. Acknowledge you.

Operator

Thank you. Your abutting catechism comes from the band of Karru Martinson with Jefferies. Please go advanced with your question.

Karru Martinson

Good morning. Absolutely actual able agenda advance and I was aloof apprehensive you apperceive what allotment are we agenda today and accustomed the affluence abject how do you feel that agenda can abound in the abreast 6 to 12 months?

Heyward Donigan

Dan, can you animadversion on that?

Dan Robson

Yeah. Thanks, Karru. You apperceive we started from a position of about accepting about no agenda e-commerce business on a about abject to our revenues. So it’s absolutely inconsequential to alike accord a amount for that. But I can acquaint you that we’ve never focused on it either until recently.

Over the accomplished six months it’s become a aerial point of our action and we accept that because of our footprint, we’re not bulk bound by any agency by the absolute cast because of advance e-commerce can bear artefact and in some case annual we accept in the approaching to bodies behindhand of whether they are bulk geographic footprint. What I can acquaint you that our acquirement has developed essentially over aftermost year and afresh our efforts to focus on growing that business are abandoned absolutely recent.

So we appearance it as a bulk allotment of our strategy. We advanced it will be a actual acceptable advance agent over time and we absolutely advanced we’re actual well-positioned to do things in a way that will admeasurement ourselves based on best-in-class e-commerce vendors not aloof those in Retail Pharmacy.

Karru Martinson

And afresh one, you talked about the displace of the online adaptable app and aggregate abroad and the focus on the rewards members, it’s been a while aback I’ve heard of an amend of breadth we angle on rewards assembly and how they’re spending is about to the blow of the chump base?

Heyward Donigan

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Sure. We’ve been not abandoned attractive adamantine at our rewards program. But aggravating to break for one of the challenges that we accustomed several months ago, which is because we’re a – a lot of bodies weren’t acquainted of the absolute annual they’re accepting from actuality in our rewards program. So we action 20% additional for abounding of our wellness additional members. And historically abounding of those assembly we abstruse weren’t alike acquainted that they are accepting that benefit.

Conversely, they were actual acquainted aback they see affectionate of aerial akin promotional appraisement action that we’ve historically had acquainted of those articles that are priced college sometimes on shelves to antithesis the abundant discounts that we absolutely accord through the wellness plus. So in any case, we’re accomplishing a actual acceptable job advancement our gold and argent members.

Our claiming is absolutely to drive new households and that’s affectionate of breadth we focus like a laser and we’ve absolutely assassin addition who’s got able acquaintance alive with added best-in-class adherence programs on the retail ancillary about four months ago and we’re authoritative actual able advance there.

Karru Martinson

Okay. And aloof afterwards aback we attending aback at my addendum from the Analyst Day, you talked about acclamation the 2023 is hopefully in the abutting 12 to 18 months, how should we aboveboard that with the handle eventually rather than afterwards with the markets reopening comment?

Heyward Donigan

I advanced I would aboveboard with if bazaar altitude are right, Karru, I’d like to be afterpiece to that 12 months and 18 months.

Karru Martinson

Okay. Acknowledge you actual much. Appreciate it.

Operator

Your abutting catechism is from the band of Bryan Hunt with Wells Fargo Securities. Please go ahead.

Bryan Hunt

Thank you for your time. And a connected cruise band of questioning. Aback you attending at the billow and same-store sales in the advanced end you’ve apparent over the aftermost six weeks or alarm it, how abounding opportunities did you accept to assurance up new barter and how abounding of those barter were unique?

Heyward Donigan

Yeah, I’ll acknowledgment that. It’s interesting, aback we attending at our online, we absolutely took measures as appropriately to ensure that we kept excess beneath ascendancy at atomic as authentic by the bazaar beneath ascendancy metrics that are appear to be accomplished through Covid-19 and so one of those measures in authoritative our online was to absolutely to focus on accouterment online adjustment opportunities and akin those opportunities to Wellness Additional members.

So, it’s affectionate of one way that we were able to ensure that, cardinal one, we could accommodate akin of personalization to our growing abject of barter and additionally bluntly bind the orders until we got the excess bottomward to reasonable levels. We did see a ample arrival of Ron’s shoppers throughout this aeon and that those trends abide to authority up.

Bryan Hunt

And how do you plan like capturing that different abstracts and those different barter that you – that accept accomplished at Rite Aid over the aftermost six weeks. I beggarly what’s the plan to go aback afterwards them?

Heyward Donigan

Well, I beggarly attending I advanced the footfall one is absolutely enrolling them, accumulate accouterment abundant bulk and accuracy about our adherence affairs to accept them appetence to accept them in our adherence program. And as I said beforehand we’ve already advised changes in our affairs and absolutely we’ll be ablution a brace affairs abutting year, but we’re not aloof affectionate of axis on their ablaze about-face abutting year.

We’ve already amorphous to change it. So the brands are already wellness additional shoppers who boutique about infrequently. So this was absolutely an befalling to reengage them in agency that we apparently wouldn’t accept asked and affectionate of admitting that we’ve apparent with COVID 19.

Bryan Hunt

And afresh my aftermost catechism is if we go to the – affectionate of your aboriginal hotspot in Washington State. Can you allocution about to any degree, what’s action on and with sales there about to the blow of your geographies and that’s it for me. Acknowledge you.

Heyward Donigan

Yeah. We’re actively watching Washington Accompaniment because we accede them to be on the advanced of this as I anticipation why you’re allurement the catechism is that we see them as a arch indicator of what our action is action to be like in New York and California and Pennsylvania aback this starts to accept — Matt, do you appetence to animadversion on some of those metrics?

Matt Schroeder

Yeah, Brian, I would say that in Washington accompaniment apparently over the aftermost anniversary or so while we we’re still seeing appropriate front-end comps there, we apparently apparent a bit of a — little bit added of a arrest in Washington compared to the action that we’re seeing in some of the added hotspots not unsurprisingly.

Heyward Donigan

We’ve also…

Bryan Hunt

Because it is appropriate drug, so I advanced about why is afterwards COVID — afterwards the aiguille COVID?

Jim Peters

As Matt and Heyward said we do appearance that as affectionate of a arch indicator to some bulk as a aftereffect as I mentioned beforehand in my animadversion that we broadcast our assignment with Instacart and that amplification absolutely started in the Pacific Northwest with Washington and the cantankerous hairs. We’ve already apparent abundant auto as a aftereffect of affluence to home delivery.

Bryan Hunt

Very good. I’ll duke it off to somebody else. Acknowledgment for your time.

Operator

We accept time for one aftermost catechism and your aftermost catechism will appear from the band of Carla Casella with JPMorgan. Please go ahead.

Carla Casella

Hi. Aloof a brace of follow-ups. Are you commented on abacus some bodies to the food beneath COVID and some account payments, can you quantify any of the added agent action that we’ll see in 2021 and if this is article that’s abiding or is, are they abiding hires or are they six months, three months, acting how you’re attractive at that?

Heyward Donigan

Well, the aboriginal affair I would say is that the hiring is absolutely to appearance up the food so we can accumulate them accessible and you apperceive we were rightsize that as this passes on a bazaar by bazaar basis. It’s additionally to accumulate our administration centermost awful functional. We don’t advanced that we will – we’ll accumulate our hiring angry to our volumes aback this passes, aback the aiguille issues canyon and afresh Matt if you can animadversion on the pay and the timing of the pay?

Matt Schroeder

Right. So we – absolutely there’s two elements to pay. One is we had a acting admission in our allowance ante for affluence and administration centermost alternate assembly that is action to at this point we would apprehend to extend through ancient in May. We additionally had a onetime account for pharmacists and affluence managers.

Those costs forth with some of the added incremental costs side, I mentioned on the alarm we apprehend to appealing abundant annual the sales annual that we saw in March. So I advanced those are action to abundantly annual anniversary added at atomic from what we see to this point. Obviously, things could change as depending on how things of COVID-19 developed.

Carla Casella

Okay, great. And afresh did you say how abundant you spent on TSA in the division and afresh how we should advanced about TSA for 2021 now, I advanced you’ve completed if I’m actual all the administration centermost transfers to Walgreens?

Heyward Donigan

So I advanced what we referenced was that we had a $12 actor admission in retailers SG&A and appealing abundant all that was due to TSA in the fourth division of 2020. Budgetary 21, there will be actual bound TSA assets as you apperceive in the adjustment of consequence maybe $1 million.

Carla Casella

Okay. Aloof one the one added clarification. The Pharmacy Casework business was a lot stronger in the division and you mentioned abacus a agglomeration of lives. Is that article that’s choppier or do you absolutely see an admission in the division added and afresh it cape off or is that a acceptable run bulk beneath the new for Action or Cover Life, sorry.

Heyward Donigan

Yeah. I don’t apperceive if I appetence to – I advanced if you will apparently attending to some of the PBM acquirement advice for 2021, you get an abstraction of affectionate of what we advanced for the all-embracing acquirement admission in the PBM business, I would acquaint you accessory that in the Med D business you basically accept a appealing appropriate abstraction breadth you’re action to be on January 1 and that’s breadth a lot of that advance came in.

I beggarly acutely appliance decidedly as it moves into some of the mail adjustment business is action to accept an impact, but you – in Med D, you do a bid, you get your lives in it for January 1 and afresh that cardinal stays about connected throughout the year.

Carla Casella

Okay. Great. And afresh aloof one description on some language, you talked about the prolong astute acreage decree abatement and you did analyze a bit that aloof Covid and bodies stocking up, but do you advanced there’s any accident that you’re accident bazaar shares to pharmacies that accept either added online administration or added online distribution?

Heyward Donigan

Yeah, Mike…

Carla Casella

Yeah.

Matt Schroeder

I’ll alpha and let Heyward and Jim advice me out, but I – but of the comments that were never absolutely added about affectionate of what we advanced is action to appear in the barter as against to us cerebration we’re accident share.

Heyward Donigan

Yeah. Correct. If annihilation we advanced acrimonious up allotment both and we accept apparent absolutely allotment – we aces up allotment on front-end and so Jim, you can allocution about pharmacy.

Jim Peters

Yeah. Sam, I would answer Matt’s comments. We were not at all implying a affair about allotment as abundant as we were aloof aggravating to outline the abeyant accident of doctor’s offices actual closed, constituent surgeries and procedures doctors’ offices actual closed, constituent surgeries and procedures continuing aloft a reasonable time aeon of actuality continued. So it was added aloof out of affluence of attention that we capital to at atomic highlight that as a potential, but absolutely no association about share.

Carla Casella

Great. That’s absolutely helpful. Acknowledgment so much.

Operator

And at this time, I will about-face the alarm aback over to Hayward for any closing remarks.

Heyward Donigan

Thank you. Acknowledgment anybody for your questions. Afore we end the call, I aloof capital to acknowledge our team. Aback the COVID-19 crisis began, we’ve been audition absurd belief about our frontline assembly assuming affliction and affair for our barter and clients. And we’ve heard these alarming belief from all areas of our business whether it’s Rite Aid, Elixir, RediClinic or Bloom Dialog, all of those companies.

I’d like to allotment one of these belief with you afore we end the call. Aftermost week, we mailed affliction bales to all of our associates, which included duke sanitizer, vitamin C support, the coveted cardboard articles as able-bodied as a agenda of acknowledgment and advance to anniversary accessory and we administer them to the food to administer to their associates. And as you know, duke sanitizer is absolutely adamantine to appear by these days.

At one of our food in Pelham, New Hampshire, there was a chump who was attractive for duke sanitizer. But the affluence was out of banal in that moment as they fly appropriate off the shelves. In an absurd act of kindness, Ursula Romana, one of our affluence assembly took the sanitizer from her affliction kits and gave it to the chump who possibly contacted our chump abutment aggregation to let us know.

Acts of affection like this are accident throughout the apple not aloof at Rite Aid abutment aggregation to let us apperceive acts of affection like this are accident throughout the apple not aloof at Rite Aid. As our aboriginal responders and frontline workers abutment our communities and in these boxy times I absolutely animate all of us to admit and bless those acts of affection as we face these aberrant challenges together.

So that concludes today’s call. Acknowledgment for abutting us and we’ll allocution afresh in June aback we address our Q1 results.

Operator

Thank you. Acknowledge you afresh for abutting today’s call. You may now disconnect.

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