Walgreens Boots Alliance (NASDAQ: WBA) delivered better-than-expected third quarter earnings thanks to higher prescription drug sales.
The Company said revenue increased 0.7% to USD 34.59 Billion, compared to estimates of USD 34.46 Billion. Adjusted earnings came in at USD 1.47 a share, topping analysts’ expectations of USD 1.43.
“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,” said Executive Vice Chairman and CEO Stefano Pessina. “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.” Walgreens aims to save an excess of USD 1.5 Billion annually by fiscal 2022.
Sales in its U.S. drugstores open at least 12 months fell 1.1% from a year earlier, which Walgreens attributed to its “de-emphasis” of tobacco products. Comparable pharmacy sales rose 6% as the Company filled 1.9% more prescriptions than it did the year-quarter earlier.
Walgreens struggled internationally, however. Sales declined 7.3% year-over-year to USD 2.8 Billion largely due to underperforming stores in the UK.
Like its competitors in the pharmaceutical business, the effort to pull in prescription drug prices ate away at Walgreen’s profit for the quarter as insurers paid pharmacies less to fill prescriptions. Looking forward, the drug store chain maintains its full-year forecast of earnings to be roughly flat.