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Sydnee Gatewood
Sydnee Gatewood
Articles (645) 

After Initial Decline, Walgreens Rises on 4th-Quarter Earnings Beat

Company posts disappointing sales growth

October 11, 2018 | About:

Drugstore chain Walgreens Boots Alliance Inc. (NASDAQ:WBA) reported strong fourth-quarter earnings before the opening bell on Thursday, but disappointing revenue sent shares lower in premarket trading.

The Deerfield, Illinois-based company posted adjusted earnings of $1.48 per share for the quarter, topping Thompson Reuters’ estimates of $1.45. Revenue grew 10.9% from the prior-year quarter to $33.4 billion as a result of its acquisition of 1,932 Rite Aid (NYSE:RAD) stores, but still fell short of the $33.78 billion analysts were expecting.

In a statement, Executive Vice Chairman and CEO Stefano Pessina commented on the Rite Aid acquisition as well as new deals with Alibaba (NYSE:BABA), Kroger (NYSE:KR) and LabCorp (NYSE:LH).

“The integration of the acquired Rite Aid stores is on track, and our pharmacy market share in the U.S. increased year-over-year on an annual basis,” he said. ”We are making progress on our partnership strategy both in the U.S. and internationally, including our most recent announcements with LabCorp, Kroger and Alibaba, which will provide additional opportunities for future growth.”

By segment, U.S. pharmacy same-store sales grew 1.3%, beating the forecasted increase of 0.57%, as a result of higher volumes. Comparable retail sales, however, declined 1.9% due to lower demand in the consumables and general merchandise category.

Internationally, pharmacy same-store sales decreased 3.4% due to lower prescription volumes. Retail sales declined 0.9%.

For the full year, Walgreens posted adjusted earnings of $6.02 per share on $131.5 billion in revenue, an increase of 11.3%.

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For fiscal 2019, Walgreens is guiding for adjusted earnings per share between $6.40 and $6.70. Wall Street forecasts earnings of $6.45 per share.

The company also recently announced a $10 billion share repurchase program.

After an initial dip, shares of Walgreens rebounded to $73.01, up 0.97%, on Thursday morning. Year to date, GuruFocus estimates the stock has lost 2%.

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Disclosure: No positions.

About the author:

Sydnee Gatewood
I am an editorial assistant at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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