Rite Aid CEO Resigns; Firm Will Restate Results

Rite Aid Corp. said Chief Executive and Chairman Martin Grass resigned, and the company will restate its financial results for fiscal 1999 and the previous two years by a total of about $500 million before taxes. The drugstore operator, whose stock has been hit this year by earnings shortfalls, declining credit ratings and allegations of wrongdoing, said Grass will be replaced on an interim basis by Chief Operating Officer and President Timothy Noonan. The negative restatement of earnings will reflect a change in accounting for lease obligations, impaired assets and other items. Rite Aid said it did not expect its second-quarter results would show any “material differences” from the 26-cents-a-share loss it forecast Oct. 11. The company made its announcements after the markets closed. Rite Aid shares gained 6 cents to close at $9.63 on the New York Stock Exchange.