Walgreen Boots Misses Q1 Earnings Forecast as U.S. Pharmacy Retail Sales Disappoint; Shares Slide

Walgreens Boots said same-store U.S. pharmacy retail sales fell 0.5% last quarter, thanks in part to a de-emphasis on tobacco products.
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Walgreens Boots Alliance Inc. (WBA) - Get Report posted weaker-than-expected first quarter earnings Wednesday, but stuck to its full-year profit guidance, as international pharmacy sales slumped and same-store sales in the U.S. missed forecasts.

Walgreens said adjusted earnings for the three months ending in November, the company's fiscal first quarter, came in at $1.37 per share, down 6.2% from the same period last year and 5 cents shy of the Street consensus forecast. Group revenues, Walgreen said, rose 1.6% to $34.3 billion, but again missed analysts' estimates of a $34.45 billion tally.

Walgreens also said it was sticking to its full-year forecast of adjusted earnings that will be essentially flat to last year's $5.99 per share total.

“We are maintaining our outlook for the year despite a soft first quarter. We are confident our strategic plans are the right ones to drive long-term sustainable growth going forward," said CEO Stefano Pessina. "In addition, during the quarter we were very satisfied with the progress made in our Transformational Cost Management Program and with the strong cash flow we delivered.”  

Walgreen shares were marked 5.8% lower in early Wednesday trading following the earnings release to change hands at $55.86 each, a move that trim the stock's six-month gain to just 1.75%.

Walgreens said international pharmacy sales fell 5.4% from last year, to $2.7 billion, while U.S. pharmacy retail sales rose 1.6% to $27.6 billion. Same store sales in the U.S., Walgreens said, fell 0.5% thanks in part to a de-emphasis on tobacco products.

Walgreens Q1 Earnings