Walgreens’ Outlook Shifts As New CEO Named

Walgreens Boots Alliance named a new CEO on Thursday (July 9) and also boosted its full-year guidance to reflect strong business fundamentals and cost-cutting.

The company said Stefano Pessina would take the helm as chief executive, after having served as executive chairman at Alliance Boots and then as interim CEO of the merged entity after Greg Wasson left the company. In comments accompanying the promotion, Executive Chairman James Skinner said Pessina was a key force in an integration that is “proceeding exceptionally well.”

As reported by The Wall Street Journal, Walgreens has been in the midst of a $1.5 billion cost-cutting initiative that is slated to extend through the end of fiscal 2017. And in its most recent quarter the company reported it had shuttered nine of 200 planned store openings. There were also 700 layoffs in its international retail pharmacy business. Walgreens hewed to its prior guidance that it will release at least $1 billion in synergies through the merger in fiscal 2016.

Looking toward earnings guidance, the company boosted its projections for the current fiscal year, which ends next month. The earnings per share is expected to come in at $3.70 to $3.80, which is higher than the previous forecast of $3.45 to $3.65. And Walgreens also kept its previous 2016 bottom line expectations in place with a range of $4.25 to $4.60 in per-share profit.

According to WSJ, in a call with analysts in the quarter that just ended, the company’s CFO, George Fairweather, said that profits would be down sequentially on expense timing. Pharmacy sales, at a majority of the top line, grew at 9.1 percent year over year. Per-share profits rose from $0.91 to $1.02, excluding one-time items.

The company raised its quarterly dividend to $0.36, up from a prior $0.34.

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