Rite Aid faces NYSE delisting amid share-price decline

Rite Aid Corp. said this week that it was in danger of being delisted from the New York Stock Exchange as its stock price and market capitalization have plunged.

The company said its stock, which has lost about 80% of its value since July and was trading at between about 52 and 55 cents per share on Thursday, would continue to trade during a customary “cure” period, which can last up to six months. At current trading levels, the company had a market capitalization of about $30 million.

The NYSE requires companies to have a minimum share price of $1 and a market capitalization of at least $15 million, among other criteria, in order to maintain their listing on the exchange. During the cure period after a delisting warning, companies typically must increase their share price to at least $1 per share for 30 days (by executing a reverse stock split, for example) in order to regain compliance.

Rite Aid said the noncompliance warning it received from the NYSE would not impact its ongoing business operations, and would not trigger any violations of its debt agreements or other obligations.

The Philadelphia-based company previously was reported to be considering filing for bankruptcy and shuttering hundreds of stores, as it faces multiple lawsuits and ongoing competitive pressures.

Related:Rite Aid, bracing for bankruptcy, will close hundreds of stores

In a statement this week, Rite Aid confirmed it has been reviewing strategic alternatives to “recapitalize, refinance, or otherwise optimize its capital structure.” The company also said its review of strategic alternatives includes an evaluation of options to regain compliance with the NYSE’s continued listing standards.

Rite Aid was scheduled to release its second-quarter earnings on Friday, after reporting a loss of $306.7 million for the first fiscal quarter in June. Revenues for the first quarter were down about 6%, to $5.65 billion.

For the second quarter, analysts were expecting the company’s financial position to continue to decline, with an estimated loss per share of $2.35 on revenues of $5.56 billion, according to Seeking Alpha.

At the time of its first-quarter earnings release, Rite Aid projected a loss for the full year of between about $650 million and $680 million.

The company currently operates more than 2,200 drugstore locations in 17 states. It closed 25 stores in the first quarter and has shuttered 180 locations since 2021.