Walgreens Boots Alliance (NASDAQ: WBA) on Tuesday reported fiscal second-quarter earnings that missed analysts’ estimates. Shares fell by over 10% following the announcement.
For the quarter ended February 28, the Company said sales were up 4.6% to USD 34.53 Billion. Analysts, however, expected Walgreens to report sales of USD 34.56 Billion. The drug store chain also fell short on analysts’ EPS predictions. Walgreens reported adjusted earnings of USD 1.64 per share, compared to USD 1.72 expected. Same-store sales dropped 3.8% in the U.S. Walgreens attributed this to a weak flu season, the continued de-emphasis on tobacco products, and a decline in sales of seasonal merchandise. Net earnings dropped 14.3% to USD 1.2 Billion compared with the same quarter a year ago.
Walgreens said it now expects full-year 2019 earnings to be roughly flat, compared with its previous forecast of 7% to 12% growth.
Through its cost management program scheduled to be implemented by the end of the month, Walgreens expects to save an excess of USD 1.5 Billion annually by 2020. “We are going to be more aggressive in our response to these rapidly shifting trends. We are focusing on our operational strengths and addressing weaknesses, making a number of senior appointments to bring change and accelerating the digitalization and transformation of our business” said Executive Vice Chairman and CEO Stefano Pessina.
The Company has already addressed shifting trends last week with its decision to begin selling CBD products in around 1,500 stores. The chain will sell cannabis-based products in Oregon, Colorado, New Mexico, Kentucky, Tennessee, Vermont, South Carolina, Illinois and Indiana.