Walgreens Makes Moves But Q1 Results Fall Short

Although it made moves to improve its performance, including the establishment of a group purchasing organization with Kroger and record online sales for Black Friday in the U.S. and United Kingdom, Walgreens Boots Alliance said sales for the first quarter were soft.

First quarter company earnings were $845 million, or 95 cents per diluted share, versus $1.12 billion, or $1.18 per diluted share versus the period the year before.

Adjusted company net earnings were $1.22 billion, or $1.37 per diluted share, versus $1.39 billion, or $1.46 per diluted share, in the year-previous quarter. Walgreens earnings fell short of a MarketBeat-published analyst consensus estimate of $1.39 per diluted share for the first quarter.

Sales in the quarter were $34.34 billion as compared to $33.79 billion in the period a year past. Operating income was $1.01 billion versus $1.4 billion in the year-prior quarter.

Retail Pharmacy USA first quarter sales were $26.1 billion, up 1.6% from the year-before quarter. Comparable sales gained by 1.6% year over year. Retail comps slipped 0.5% from the period a year previous, Walgreens stated, mostly due to continued de-emphasis of tobacco. Pharmacy comps advanced 2.5% versus the period a year previous. Operating income decreased 27.3% from the year-earlier quarter to $848 million. With costs related to the acquisition of Rite Aid stores and to a transformational cost management program excluded, adjusted operating income decreased 16.2% from the year-past period to $1.16 billion.

In announcing the first quarter sales, Walgreens executive vice chairman and CEO, Stefano Pessina, said, “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.”