Walgreens Beats Estimates, Shares Jump 3.5%
Walgreens Boots Alliance Inc. (NASDAQ:WBA) beat earnings estimates, as major trends in prescription drugs offset a slump in retail sales. Walgreens attracted shoppers by offering a better overall shopping experience and offering high-end products.
In the U.S., Walgreens same-store retail sales declined 0.6% in the quarter ended on November 30 compared to the previous year. Excluding one-time items, earnings reached $1.03 a share, beating analyst estimates of 96 cents a share.
Walgreens stock was up 3.5% on Thursday on the news.
Drugstore sales in the U.S. were down 4.2% compared to last year, reaching $20.4 billion. Same-store sales were up 5.8%, with retail sales declining 0.6% and pharmacy sales jumping 9.3%. Walgreens pharmacies in the U.S. filled 231 million prescriptions during the quarter, inching up 4.1% compared to last year.
Total sales reached $29 billion, an increase of 48%, thanks to a merger between Alliance Boots GmbH and Walgreen Co. in 2014.
Walgreens revised its low-end of earnings guidance higher for the 2016 fiscal year, boosting it by 5 cents to $4.30.
CEO Stefano Pessina stated that the company is always open to new deals and mergers, but that Walgreens is focusing on its current acquisitions. In October, the drugstore chain agreed to purchase Rite Aid Corp. in a $9.4 billion deal that’s expected to close in the latter half of 2016.
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