Categories Earnings, Retail

Walgreens Q4 earnings beat; stock tanks on sales miss

Benefitting from strong pharmacy sales in the US, earnings of drugstore chain Walgreens Boots (WBA) rose sharply and topped Wall Street estimates in the August quarter. Meanwhile, the company’s stock plunged in premarket trading Thursday after sales missed expectations, despite a 10% increase.

Earnings, adjusted for non-recurring items, increased 13% year-over-year to $1.48 per share, far exceeding expectations. On a reported basis, profit nearly doubled to $1.5 billion or $1.55 per share from $0.8 billion or $0.76 per share in the same period last year.

Walgreens Boots Q4 sales up 11%

During the fourth quarter, sales climbed to $33.4 billion aided by a 14% increase in pharmacy sales in the US, especially in the Rite Aid stores. The top-line, however, slightly missed analysts’ forecast. Sales of Retail Pharmacy-International dropped 1.9%, while those of Pharmaceutical Wholesale rose 2.3% during the three-month period.

“We are making progress on our partnership strategy both in the U.S. and internationally, including our most recent announcements with LabCorp, Kroger and Alibaba, which will provide additional opportunities for future growth,” said Walgreens CEO Stefano Pessina.

Walgreens acquires pharmacy files from Fred’s for $165 million

In the whole of 2018, the management returned $6.8 billion to shareholders through stock repurchases and dividends. In fiscal 2019, adjusted earnings are expected to be in the range of $6.40 per share to $6.70 per share, at current exchange rates. At constant currency rates, earnings are seen rising between 7% and 12%.

After acquiring about 50% of the Rite Aid pharmacy chain a few years ago, Walgreens expanded its footprint in the healthcare services sector significantly. New developments such as the proposed acquisition of Aetna (AET) by CVS Health (CVS) and Amazon’s (AMZN) entry into pharmacy business are expected to intensify competition in the sector in the coming months.

Walgreens shares closed the previous trading session down 2% and dropped further in premarket trading Thursday after the earnings announcement.

Walgreens Boots Alliance sales jump in third quarter

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

2 thoughts on “Walgreens Q4 earnings beat; stock tanks on sales miss

Comments are closed.

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top