Revenue during the quarter went down marginally by 0.79 percent to $8,089.73 million from $8,154.18 million in the previous year period. Gross margin for the quarter contracted 114 basis points over the previous year period to 23.42 percent. Total expenses were 98.59 percent of quarterly revenues, up from 97.28 percent for the same period last year. That has resulted in a contraction of 130 basis points in operating margin to 1.41 percent.

However, the adjusted EBITDA for the quarter stood at $221.72 million compared with $339.26 million in the prior year period. At the same time, adjusted EBITDA margin contracted 142 basis points in the quarter to 2.74 percent from 4.16 percent in the last year period.

"Despite the difficult operating environment created by the extended duration of the merger process with WBA, our third quarter results show solid performance in our front-end business, good cost control and continued strong growth at our pharmacy benefit manager, EnvisionRx," said chairman and chief executive officer John Standley. "Reimbursement rates remain our largest challenge and we expect that to continue for the remainder of the fiscal year. Moving forward, we will remain focused on improving the health of our patients through clinical services like immunizations and medication adherence, converting additional stores to our highly successful Wellness format and working as a team to deliver a consistently outstanding experience to our customers."

The company has spent $372.38 million cash to meet investing activities during the nine month period as against cash outgo of $2,281.63 million in the last year period.

Cash flow from financing activities was $302.48 million for the nine month period, down 82.44 percent or $1,419.97 million, when compared with the last year period.

Cash and cash equivalents stood at $220.03 million as on Nov. 26, 2016, down 2.75 percent or $6.22 million from $226.25 million on Nov. 28, 2015.

Working capital increases
Rite Aid Corporation has recorded an increase in the working capital over the last year. It stood at $1,945.63 million as at Nov. 26, 2016, up 18.48 percent or $303.46 million from $1,642.17 million on Nov. 28, 2015. Current ratio was at 1.63 as on Nov. 26, 2016, up from 1.52 on Nov. 28, 2015.

Cash conversion cycle (CCC) has decreased to 17 days for the quarter from 38 days for the last year period. Days sales outstanding went up to 20 days for the quarter compared with 19 days for the same period last year.

Days inventory outstanding has decreased to 22 days for the quarter compared with 43 days for the previous year period. At the same time, days payable outstanding was almost stable at 25 days for the quarter, when compared with the previous year period.