The company’s shares went up after releasing fiscal third-quarter earnings…
Walgreens saw its shares rise after releasing a better-than-expected earnings report.
In many ways, it’s surprising that Walgreens shares went up at all. Although the earnings report was better than what investors were expecting, it still wasn’t all that great.
Walgreens saw its international sales fall sharply and its adjusted earnings were lower than they were a year ago. CEO Stefano Pessina said it was the most difficult quarter the company has experienced since acquiring Alliance Boots in 2014.
Details About the Earnings Report
During the fiscal third quarter, Walgreens’ revenue reached $34.6 billion which is up 8% year over year. Sales in the company’s retail pharmacy unit increased by more than 2% to reach $26.5 billion.
However, the company’s international sales fell by more than 7% to $2.8 billion. And the company’s pharmacy wholesale unit fell nearly 2% to $5.9 billion.
Walgreens’ adjusted earnings per share were $1.47, which is less than the $1.53 the company earned a year earlier. However, it was still 4 cents higher than what investors were expecting.
In spite of the decreased earnings, Walgreens maintained its full-year guidance. The company’s stock is down more than 20% this year and the company’s numbers continue to fall short of where they were even one year earlier.
What’s Next for Walgreens?
Walgreens may have beaten investor expectations but its results were still pretty unimpressive. Like other brick-and-mortar retailers, Walgreens has taken a hit as consumers shift to buying household items online.
And Amazon recently announced a partnership with the company Rite Aid where customers can order products from Amazon and pick them up in Rite Aid stores. Walgreens also has to deal with rising drug inflation and a decrease in its same-store sales.
However, Walgreens has formed deals with companies like Kroeger and FedEx in an attempt to encourage more customers to visit its stores. And after the company’s last earnings report, it laid out a plan to save $1.5 billion by shutting down certain stores and consolidating its warehouses.
But it’s unlikely that these efforts will be enough to save Walgreens. In the meantime, the company’s sales will likely continue to suffer.
