Walgreen Boots Alliance (WBA) released fiscal its Q3 earnings recently, reporting lower profits as there was a shift in sales to low-margin items, increased supply-chain costs, and increased expenses for labor and store cleaning.
Walgreens confirmed that its profits were dragged down primarily by the United Kingdom, resulting in the drugstore chain to cut more than 4,000 jobs in its Boots UK and Boots Opticians businesses in the United Kingdom and closure of 48 optician centers. The company now plans to focus on adding health care services to its stores.
Highlights from the earnings report for the quarter ending May 31:
- Revenue of $34.63 billion was reported vs. $34.36 billion expected.
- EPS of 83 cents was reported versus an expectation of $1.17.
- A net loss of $1.71 billion was reported.
- Sales increased marginally to $34.63 billion in comparison to $34.59 billion a year earlier.
- Footfall in Boots UK stores dropped by about 85% in April, amid lockdown.
- Company’s beauty and fragrance counters “were effectively closed” with more than 100 stores in places like airports were temporarily shut.
- Sales at U.S. stores open at least a year were up 3% from the same period a year ago, ahead of expectations.
- Same-store sales increased by 3.5% in comparison to the last year same time for the pharmacy part of the stores
- Same-store retail sales rose by 1.9% for the quarter, as demand for vitamins and essential equipment like masks increased.
- The company raised its annual cost-savings target to more than $2 billion by 2022.
In caution to the pandemic to continue to challenge the business, the company anticipates adjusted earnings per share for the fiscal year to be between $4.65 to $4.75 based on June sales trends. The company suspended share buybacks and increased its dividend by 2.2%.
Walgreen Boots Alliance (WBA) is a pharmacy-led, health and well-being enterprise with a long history of trusted healthcare services, community pharmacy care, and pharmaceutical wholesaling dates. To learn more about Walgreen Boots Alliance (WBA) and to continue to track its progress please visit the Vista Partners Walgreens Boots Alliance Page.
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