Earnings

Walgreens Fiscal 3Q Results Top Street, But Retail Sales Slip

Walgreens Boots Alliance Inc.’s latest earnings results came in above the Street on Thursday (June 28), boosted by the buyout of several Rite Aid stores.

The firm reported adjusted earnings of $1.53, which topped expectations by a nickel. Sales stood at $34.3 billion, which topped the Street at $3.0 billion. Reuters stated that net income attributable to Walgreens (on its own) was up 15.5 percent to $1.3 billion, or $1.35 per share.

In the wake of the earnings report, Reuters commented that Walgreens’ consolidated pharmacy sales were up 19.5 percent in the fiscal third quarter, which ended May 31, tied in part to volumes at those aforementioned stores. But same-store sales were flat year over year. That reading missed expectations for a 3.7 percent gain.

The slip comes amid a general retail segment malaise, where same-store sales here were down 3.8 percent — a trend that comes as fewer sales are done in-store and instead have moved to digital channels.

In initial feedback from Wall Street, at least as evidenced by one research note, “In what has become the norm for Walgreens’ print, there are a ton of moving parts,” analyst Ross Muken of Evercore said, adding that the U.S. business missed estimates amid market share losses in Medicare Part D.

The earnings news may have been overshadowed on Thursday by the announcement, as relayed by CNBC, that Amazon has agreed to buy online pharmacy PillPack — an online pharmacy that packages and delivers presorted medications. The firm is licensed to ship prescriptions in almost all U.S. states and had a revenue run rate of as much as $100 million annually. In intraday trading, shares of Walgreens were down as much as 9 percent.

In other company-specific news that came in tandem with the announcement, Walgreens said it would buy back as much as $10 billion of its stock.

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