Walgreens begins 2020 much as it ended 2019, on a sour note

Henrietta Strickland
January 12, 2020

The company announced in October that profit in the fourth quarter of the fiscal year had decreased by 55% and the annual savings target from the cost reduction program had been raised to $ 1.8 billion by fiscal year 2022, after previously $ 1.5 billion Dollars were targeted.

Future financial savings have been overshadowed by the present setting of sliding earnings, nevertheless.

But Walgreens shares dropped 5.7% o $55.92 in trading Wednesday - dealing another blow to a stock that wrapped up 2019 as the worst-performing in the Dow Jones Industrial Average.

Walgreens Boots Alliance Inc. runs greater than 18,750 shops, together with practically 9,300 in the US. Walgreens has faced intense competition from the arrival of Amazon.com Inc in the pharmacy market in the past year.

Walgreens is trying a number of different partnerships to draw more people into its stores. It is adding health care services and testing primary care clinics in some markets.

The company also is partnering with the grocer Kroger Co.to improve food selection in other stores. Those companies also formed a group purchasing organization to save money.

Government Vice Chairman and CEO Stefano Pessina advised business analysts Wednesday that the corporate has a medium to long-term enchancment technique as an alternative of focusing primarily on bumping up the following quarter's outcomes.

Walgreens, which also owns the Boots drugstore chain in Europe, is getting squeezed in USA negotiations with pharmacy-benefit managers, which serve insurers and other clients by choosing which medicines to cover and pushing for lower prices from drugmakers and sellers.

"I hope that in the end, we will be right", he said.

The company didn't address reports from late a year ago that it was in talks with private-equity firm KKR & Co. over a potential buyout.

Walgreens earned $845 million within the quarter that ended November 30.

Excluding items, the company earned $1.37 per share, missing estimates of $1.41. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.40 per share. The business had revenue of $34.34 billion for the quarter, compared to analysts' expectations of $34.45 billion.

In recent years, the Deerfield, Illinois-based company had benefited from steep falls in generic drug prices that helped it offset the pressure from lower reimbursement rates, but such declines have slowed in the past year.

Other reports by Click Lancashire

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