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Fitch changes Rite Aid watch to negative
Fitch Ratings said it revised the rating watch for Rite Aid Corp., including the B long-term issuer default rating, to negative following the announcement of a revised transaction proposal between Rite Aid and Walgreens Boots Alliance, Inc.
Fitch said the negative watch recognizes recent Rite Aid operating declines, with pharmacy comparable store sales (comps) trending down around 4% over the past year and EBITDA falling from $1.4 billion in 2015 to the $900 million range expected in 2017 (before the impact of the transaction), yielding flattish to negative free cash flow.
The watch also recognizes the company's weakened market position post-store divestitures and a potential lapse in long-term strategic planning given expectations that the company would be acquired, the agency added.
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