NEW YORK (TheStreet) -- Wagreens Boots Alliance(WBA) - Get Report reported earnings on Thursday that beat estimates following the start of its major cost-cutting strategy.

The biggest U.S. drugstore chain raised also its earnings outlook for the year ahead and announced that acting CEO Stefano Pessina will be offered the permanent role. Pessina is the company's largest shareholder and had been holding the temporary CEO position for the last six months.

In a statement, the company called Pessina "the very best person to achieve our vision to be a truly global health care champion." The 73-year-old Italian formerly ran the Alliance Boots chains in Europe prior to their acquisition by Walgreens.

Walgreens reported earnings of $1.02 a share for its fiscal third quarter ended on May 31, topping estimates of 87 cents, and revenue came in at $28.8 billion, up on last year's numbers but falling short of estimates. The merger with Alliance Boots boosted sales, and Walgreens announced a 6.7% increase to its dividend.

Same-store sales rose 6.3% in the U.S. The company plans to close around 200 stores by the end of its restructuring and shift its focus to more high-end products. The company is aiming to make savings of around $1.5 billion in the next two years.

Walgreens also announced that it will buy U.K. skin-care and beauty brand Liz Earle from Avon Products(AVP) - Get Report for $215.7 million in cash. Avon bought the skin-care company in 2010.

Other drugstore chains have also been buying competing stores in a battle for market share. So far this year, CVS Health(CVS) - Get Report has agreed to acquire Target's(TGT) - Get Report pharmacy branch, and Rite Aid(RAD) - Get Report has agreed to buy Envision Pharmaceutical Services.

Shares of Walgreens were up 4.8% to $90.06 on Thursday afternoon. The stock is up 18% this year.