Earnings

Walgreens Accelerates Digitalization In Q1

Walgreens Q1 earnings 2020

As Walgreens made “substantial progress” on accelerating its digitalization, among other strategic priorities, the pharmacy chain had fiscal 2020 first-quarter revenues of $34.3 billion and adjusted earnings per share (EPS) of $1.37 per an announcement from the company on Wednesday (Jan. 8).

The company also had record online sales over Black Friday in the U.S. as well as the U.K., but its results fell below analyst expectations of $34.6 billion in revenues and $1.41 in EPS.

Walgreens Executive Vice Chairman and CEO Stefano Pessina said in the announcement, “we are maintaining our outlook for the year despite a soft first quarter. We are confident our strategic plans are the right ones to drive long-term sustainable growth going forward. In addition, during the quarter we were very satisfied with the progress made in our Transformational Cost Management Program and with the strong cash flow we delivered.”

During the quarter, the company’s first two of five VillageMD primary care clinics, Village Medical at Walgreens, opened in Houston and the Flagship No7 beauty brand experienced “sales growth in the mid teens in the U.S.” per the announcement. It also noted that Walgreens and Kroger created group purchasing organization and grew their work together with a new joint venture looking to offer cost savings, as well as other benefits, across owned brand sourcing.

In December, news surfaced that Kroger and Walgreens were growing their partnership to create a new group purchasing organization (GPO) called the Retail Procurement Alliance, which will pool resources to reduce costs and advance innovation. Gary Millerchip, chief financial officer for Kroger, said in a press release at the time, “this collaboration is an extension of the strategic collaboration announced last year to create value for customers and shareholders of both companies.”

He also noted that the two firms were committed to building efficiency by “increasing innovation and competition through sourcing … and reinvent critical components of our sourcing practices.”

And, in October, news surfaced that logistics and shipping firm FedEx had announced that it is working with Walgreens to let shoppers return items at thousands of locations around the country. FedEx Returns Technology, which is the company’s “solution for simplifying returns” and is currently available at the 1,900 FedEx Office locations throughout the nation, was also to be available at Walgreens.

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