Raia Drogasil surpasses profit forecast in the 1st quarter and makes digital offensive after coronavirus

Raia Drogasil (RD) exceeded forecasts in the first quarter result, since the maintenance of activities of 95% of its stores and the escalation of digital sales helped the largest drugstore chain in the country to overcome the economic effect of coronavirus. RD reported on Tuesday (28) that it had adjusted profit of R$ 152.75 million in the first quarter, up 44.8% compared to a year earlier. It was not immediately clear whether the number was comparable to the average forecast of analysts consulted by Refinitiv of R$ 131.14 million. Profit including non-recurring effects was R$ 145.84 million, up 42.9%. The owner of the drugstore chains Raia and Drogasil also reported having started a pilot of an arm of welfare services, Health in Day, involving medical consultations via telemedicine, psychological teleservice and symptom checker via chatbot. RD also said it is evaluating making rapid tests available for Covid-19 on its network and that it had sales "significantly above normal in the weeks leading up to the restrictions" imposed to address the pandemic. The statements show the movement of the sector, one of the few to keep operations active in the midst of isolation measures, because it is considered essential, to deal with the new scenario in which transactions have been made mainly by digital channels. Operating income measured by earnings before taxes, interest, depreciation and amortization (Ebitda) adjusted from January to March was R$ 369.4 million, compared to analysts' forecast of R$ 327.5 million. Adjusted Ebitda margin was 7.1%, an expansion of 0.6 percentage points year-on-year. RD reiterated its forecast to open 240 new stores by 2020, even with the effects of coronavirus, although it warned that openings of some new stores could delay.