Walgreens Boots Profit Slips--Update
January 05 2017 - 8:22AM
Dow Jones News
By Anne Steele
Walgreens Boots Alliance Inc. said revenue and profit fell in
the latest quarter, but the company raised the low end of its
yearly guidance as it expects recent partnerships to help
earnings.
"We continue to anticipate that growth in the second half of
fiscal 2017 will reflect the new strategic pharmacy partnerships we
announced last year," said Chief Executive Stefano Pessina.
Walgreens is hoping to win more patients to its pharmacies with
a string of new agreements with health-care companies that
encourage patients to use Walgreens pharmacies. Those include a
partnership with Prime Therapeutics, a pharmacy-benefits manager
owned by Blue Cross and Blue Shield health plans, which makes
Walgreens a preferred pharmacy where patients pay less to fill
prescriptions. It also replaced CVS Health as in-network pharmacy
for Tricare, a health-care program for military personnel and their
families.
Last month, Walgreens and Rite-Aid Corp., under pressure from
antitrust regulators, moved a step closer to consummating their
$9.4 billion tie-up by agreeing to sell 865 Rite-Aid locations to
Fred's Inc.
On Thursday Mr. Pessina said the companies continue to work
toward closing the merger early this year.
Meanwhile, Walgreens has been trying to win more pharmacy
customers, improve margins in its U.S. stores and cut costs
throughout its enterprise.
In its largest division, the U.S. retail pharmacy business,
Walgreens posted a 1.1% increase in sales at existing stores, as
stronger pharmacy sales offset a small decline in front-end sales.
The company filled 3% more prescriptions versus a year ago as it
continues to get more volume from Medicare patients.
Walgreens said retail sales at stores open at least a year fell
0.5% during the quarter, due to lower sales of consumables, general
merchandise and beauty categories, partially offset by sales in the
health, wellness and beauty categories.
In all, the company posted a profit of $1.05 billion, or 97
cents a share, down from $1.11 billion, or $1.01 a share, a year
earlier. Excluding certain items, adjusted per-share profit rose to
$1.10 from $1.03.
Revenue slipped 1.8% to $28.5 billion. Analysts had projected
$1.09 in adjusted per-share earnings on $29.2 billion in sales,
according to Thomson Reuters.
Walgreens said it now expects $4.90 to $5.20 in adjusted
earnings per share for its new fiscal year, compared with its
previous guidance for $4.85 to $5.20 a share.
Walgreens shares, inactive premarket, have risen 3.1% over the
past three months.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 05, 2017 08:07 ET (13:07 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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