Walgreens Boots Still Sees Rite Aid Deal Closing by July
April 05 2017 - 8:18AM
Dow Jones News
By Joshua Jamerson
Walgreens Boots Alliance Inc.'s pharmacy business picked up in
the U.S. in the latest period with the highest quarterly
prescription growth in years, but reported revenue fell more than
Wall Street anticipated.
The company offered no new information regarding its
much-watched tie-up with Rite Aid Corp., saying the deal was
on-track to close by its extended timeline of the end of July.
Comparable pharmacy sales increased 4.2% on higher volume, as
prescriptions filled in comparable U.S. stores increased 7.9%
compared with the same quarter a year ago, which the drugstore
operator said was its highest growth in more than seven years.
Walgreens attributed the results to the expansion of the Medicare
Part D program as well as its pharmacy partnerships.
Meanwhile, comparable retail sales fell 0.8% amid what the
company called "a challenging market," hurt by declines in the
consumables and general merchandise category and the personal care
category partially. Those segments offset growth in the health and
wellness category and of beauty products.
Walgreens stock, which has fallen 1% from over the past 12
months, fell another 1.1% to $81.56 in premarket trading.
Investors have been awaiting the delayed tie-up between
drugstore chains Walgreens and Rite Aid, and have grown
increasingly uneasy that the deal, heavily scrutinized by
regulators, could fall apart. Among the antitrust concerns, the
resulting drugstore giant -- which would challenge CVS Health Corp.
-- would be able to bully pharmacy-benefit managers steering
corporate and government drug plans. The deal was originally
unveiled in October 2015.
Over all, for the period that ended Feb. 28, Walgreens earned
$1.06 billion, or 98 cents a share, compared with $930 million, or
85 cents a share, in the year-ago period, as sales fell 2.4% to
$29.4 billion. Excluding certain items, the company said it earned
$1.36 a share, in line with the consensus estimate by analysts
polled by Thomson Reuters. Analysts expected $30.18 billion in
revenue.
Walgreens, which backed its fiscal 2017 outlook of adjusted
per-share earnings in a range of $4.90 to $5.08, also detailed a $1
billion share buyback program.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
April 05, 2017 08:03 ET (12:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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