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The shares of Walgreens Boots Alliance Inc. were on track to reach their lowest level since 2014 after the company released a profit for the second quarter of fiscal year not meeting expectations and to A reduction in its prospects for the whole of the exercise.
Shares fell 12% Tuesday. Managing Director Stefano Pessina called the quarter "the most difficult quarter we've seen since the formation of Walgreens Boots Alliance".
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. "
Net income fell to $ 1.16 billion, or $ 1.24 per share, from $ 1.35 billion, or $ 1.36 per share, over the same period last year . Excluding non-recurring items, the company said Adjusted EPS decreased 5.4% to $ 1.64, a level below $ 1.72 expected by FactSet analysts.
"A number of trends that we expected and were preparing for had impacted us much faster than we had anticipated," Pessina said Tuesday during a telephone conversation with analysts. inflation and less than anticipated benefits from our work to update and renew our retail offering, primarily in the US "
Sales, which rose 4.6% to $ 34.53 billion, were slightly below the FactSet consensus of $ 34.58 billion. In the United States, retail sales per store dropped by 3.8%, which Walgreens attributed to the weakness of the cough, cold and flu season, lower sales of tobacco and sales of seasonal products. US pharmacy sales, which accounted for more than 70% of US sales in the quarter, increased 9.8% from the same quarter last year due to higher prescription volumes. resulting from the acquisition of Rite Aid stores. However, comparable store growth in the pharmacy and retail sectors is trending lower than expected, said James Kehoe, chief financial officer, at the call for results.
Walgreens is now expecting the earnings of the 2019 fiscal year to be stable, compared to previous expectations of a growth of 7% to 12%. The company announced plans to reduce costs by more than $ 1.5 billion by fiscal year 2022, an increase from $ 1 billion.
In a note to customers, Ross Muken, an analyst at Evercore ISI, said Walgreens was "besieged" and called the company's plan "uninspiring". saw "no apparent strategy."
The company's poor performance in the second quarter and the company's disappointing forecasts spurred speculation on future mergers and acquisitions opportunities. Pessina, however, reacted in this way to the profit appeal, saying that the company's point of view remained unchanged. "We see no reason to use our money – to pay too much for something – simply because, as we have said, of the deterioration of the market," he said.
In an increasingly difficult market, Walgreens has formed numerous partnerships in order to diversify its activities. He has partnered with the Kroger Co. grocery chain.
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explore a pilot program allowing customers to order online grocery products and pick them up at participating Walgreens stores. The company took a minority stake in Birchbox Inc. in October and began selling the company's box-office products in selected US stores. She also works with Humana Inc.
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, Sprint Corp.
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, FedEx Corp.
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and the LabCorp diagnostic testing company on services ranging from dispensing drugs to opening diagnostic test centers inside stores.
But these efforts may not be enough for investors.
"As the world is repositioning itself for a harder environment, WBA basically has not moved," said Holz. "Those looking for a quick fix can not be appeased by anything said today or in the short term."
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