rite aid corp is closing stores and looking for ways to boost its revenue as it faces widening losses and a pile of debt “it’s really about driving growth that will ultimately generate increased ebitda and allow us to pay down more of this debt” chief financial officer matt schroeder said rite aid said its net debt totaled 27 billion in february down from 29 billion a year earlier the camp hill pabased drugstore operator has amassed debt over the years largely through its 2015 purchase of pharmacybenefit manager envision pharmaceutical services which it bought for about 2 billion from investment firm tpg inc the company’s ratio of net debt to earnings before interest taxes depreciation and amortization stood at 54 times when its latest fiscal year ended on feb 26 down from 67 times a year earlier the company said the company wants to reduce its leverage ratio to 45 times by february 2025 which would still be higher than those of some of its rivals including walgreens boots alliance inc and cvs health corp rite aid lags its rivals in part because it generates less revenue per store due to more locations in lowerincome areas said elizabeth anderson a managing director at evercore isi the research arm of the financialservices firm the company’s debt position is “overall not great” ms anderson said “if your ebitda has been declining it’s hard to reduce your debt load” she said rite aid plans to reduce its leverage ratio in part through closing stores and building prescription volume which in turn would bolster the cash flow it uses to repay debt mr schroeder said rite aid also expects investments in its ecommerce operations will help boost ebitda by reducing operating expenses and increasing prescriptions mr schroeder said those investments include expanding capabilities in prescription refills which are intended to give pharmacists more time for customer consultations he said “i want to find the right balance where we can make those investments and still chip away at the debt to some extent and grow that ebitda” mr schroeder said “that’s the sweet spot we’re looking at” the company said it expects to spend about 250 million on capital expenditures during its current fiscal year compared with 2207 million during the prior year rite aid over the past nine months closed about 145 stores it deemed unprofitable it operated 2450 drugstores across 17 states as of feb 26 the company meanwhile plans to start opening smaller stores focusing on prescription services with five set to open by december store closures are expected to help strengthen the company’s cash flow enabling it to further repay debt mr schroeder said cash and cash equivalents totaled 561 million as of may 28 down from 53 the year before rite aid last week said its firstquarter loss widened to 1102 million partly due to impairment charges driven by the store closures compared with a loss of 131 million a year earlier the company projected a wider net loss for the year ending in february 2023 of between 2033 million and 2463 million up from an april estimate of 167 million to 210 million rite aid reported 60 billion in revenue for the quarter ended may 28 down 24 from the prioryear period the company said it expects to book 130 million in impairment charges for the year due to its store closures and spend 210 million on interest expenses compared with 1916 million for the prior fiscal year rite aid on tuesday completed a 150 million cash tender offer its latest move to pay down debt and buy back some of its publicly traded bonds at a discount according to mr schroeder the company has no debt coming due until 2025 when 485 million in bonds mature he said the federal reserve’s recent rate increases are “certainly something for us to keep an eye on” mr schroeder said about half of the company’s debt has floating rates meaning interest costs go up when interest rates rise rite aid hopes that creditratings firms will lift its ratings by “a couple notches” over the next three years which will likely make future refinancings easier mr schroeder said sp global ratings earlier this month downgraded rite aid from ccc to cc—10 notches lower than an investmentgrade rating—saying the company lacked significant excess cash reserves to fund its cash tender without incurring additional debt fitch ratings inc and moody’s investors service have rated it b and b3 respectively both six notches away from investment grade “time will tell how we get there but if we execute this leverage ratio target i’m confident we will get credit rating increases over time” mr schroeder said