Walgreens Cost Cuts Help Beat Estimates As US Retail Drops
Walgreens Boots Alliance Inc.’s cost-cutting measures helped the drugstore chain beat analysts’ earnings estimates for the fiscal second quarter, as US same-store retail sales dropped again and pharmacy revenue growth weakened because of a mild flu season.
Recent efforts to renovate stores and add higher quality items to bring in shoppers have yet to pay off. In the US, where Walgreens makes almost 80 per cent of annual revenue, same-store retail sales fell 0.3 per cent in the quarter ended in February, according to a statement Tuesday. It’s the second quarterly decline in a row for that measure of sales, which excludes the newest stores.
The shares fell 1.5 per cent to $85 before the markets opened.
Earnings, excluding one-time items, were $1.31 a share, compared with the $1.28 average of analysts’ estimates compiled by Bloomberg. The company also raised the lower-end of its 2016 earnings forecast.
US drugstore sales were $21.5 billion, up 2.1 per cent from a year ago, while same-store sales were up 2.2 per cent. Overall sales rose 14 per cent to $30.2 billion. Analysts anticipated $30.7 billion. The company raised the lower end of its earnings guidance by 5 cents, to a range of $4.35 to $4.55 a share.
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