Walgreens Retail Comps Slip In Q3

More restrictive tobacco sales policies hit Walgreens Boots Alliance front-end revenue in the third quarter, as the retailer struggled to gain overall business momentum.

Net earnings were $1.03 billion, or $1.13 per diluted share, versus $1.34 billion, or $1.35 per diluted share, in the year-previous period. Adjusted company net income was $1.34 billion, or $1.47 per diluted share, versus $1.52 billion, or $1.53 per diluted share, in the quarter a year before.

Sales were $34.59 billion versus $34.33 billion in the year-earlier quarter. Operating income was $1.20 billion compared to $1.6 billion in the quarter a year prior.

Retail pharmacy USA sales in the quarter were $26.5 billion, up 2.3% over the year-previous quarter. Excluding the impact of store optimization following Rite Aid store purchases, organic sales gained 2.9%. Retail, or front-end sales, including general merchandise but excluding pharmacy revenues, decreased 2.9% in the quarter year over year, including the impact of store optimization. Comparable retail sales slipped 1.1% from the year-before period, primarily due to continued de-emphasis of tobacco, Walgreens asserted.

Stefano Pessina, Walgreens executive vice chairman and CEO, said, “Following a difficult second quarter, we made progress in the third quarter against the strategic goals we set, and are pleased to report an improvement in our U.S. comparable growth compared with the first half of the year. We will continue our aggressive response to rapidly shifting trends, and have already seen improved U.S. retail sales and prescription growth and are making good progress in implementing our transformational cost management program. Together, this gives us the confidence to reiterate the fiscal 2019 guidance we previously provided.”