Walgreens Reports Solid Second Quarter Sales

As it completed its purchase of Rite Aid stores, Walgreens Boots Alliance reported solid second quarter sales results.

Fiscal 2018 second quarter net earnings rose to $1.3 billion while diluted net earnings per share increased to $1.36. Adjusted fiscal 2018 second quarter net earnings rose to $1.7 billion, up 15.1% on a constant currency basis, compared with the same quarter a year ago. Adjusted diluted net earnings per share for the quarter increased to $1.73.

Sales in the second quarter were $33 billion, an increase of 12.1% from the year-ago quarter, and an increase of 9.4% on a constant currency basis.

The company’s retail pharmacy division in the U.S. had second quarter sales of $24.5 billion, an increase of 12.2% over the year-ago quarter. Sales in comparable stores increased 2.4% compared with the same quarter a year ago. Comparable pharmacy sales increased 5.1%, while retail sales decreased 0.7% in the second quarter compared with the year-ago period. Comparable retail sales were down 2.7% in the quarter.

Stefano Pessina, executive vice chairman and CEO, Walgreens, said, “Our growth strategy of increasing and consolidating volume, differentiating ourselves through value and quality of service, and controlling costs is bearing fruit across our businesses. This is reflected in another good set of financial results in which we delivered the highest sales growth in eight quarters, as well as strong cash generation and record U.S. pharmacy market share. We expect to continue to grow, in part through the recent acquisition of stores from Rite Aid, and today we are raising our fiscal 2018 guidance.”

Walgreens recently completed the acquisition of 1,932 Rite Aid stores. The company continues to integrate the acquired stores and related assets. As part of a program to optimize locations, the company expects to close approximately 600 stores and related assets over an 18-month period, resulting in estimated pre-tax charges to the company’s GAAP financial results of approximately $450 million.