Walgreens Boots Misses Q3 Earnings Forecast As Coronavirus Store Closures Hit Sales

Walgreens said the impact of the coronavirus cost the company around $750 million in third quarter sales, while its UK operations were hit with a charge of $2 billion.
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Walgreens Boots Alliance Inc.  (WBA) - Get Report posted weaker-than-expected third quarter earnings Thursday, and suspended its share buyback program, as stay-at-home orders in key markets around the world hit the retailer's top and bottom line.  

Walgreens said adjusted earnings for the three months ending in May, the group's fiscal third quarter, were pegged at 83 cents per share, down 43.5% from the same period last year and firmly below the Street consensus estimate of $1.18 per share. Group revenues, Walgreens said, rose 0.1% from last year to $34.6 billion, just ahead of analysts' estimates of a $34.35 billion tally. 

Walgreens also said its biggest quarterly hit came from the United Kingdom, where it operates under the Boots brand and tallied up charges equal to $2 billion, with the company unveiling plans to cut some 4,000 jobs as a result. 

Looking into the remained of the company's financial year, Walgreens said it sees adjusted earnings in the region of $4.65 per share to $4.75 per share, a figure that includes a coronavirus impact of between $1.03 and $1.14 per share. 

“Prior to the pandemic our financial performance for fiscal 2020 was on track with our expectations. However, this unprecedented global crisis led to a loss in the quarter as stay-at-home orders affected all of our markets," said CEO Stefano Pessina. "

"Shopping patterns are evolving more rapidly than ever as consumers further embrace digital options, spurring us to accelerate our ongoing investments in digital transformation and neighborhood health destinations,” he added  

Dow component Walgreens shares were marked 5.7% lower in early trading following the earnings release to change hands at $39.92 each, a move that would extend the stock's year-to-date gain to around 35%.