Walgreens Boots Alliance cut its profit forecast for fiscal 2024 and announced store closures, citing challenging pharmacy industry trends and a worse-than-expected US consumer environment.
The company will close certain underperforming US stores as part of its strategic review and simplify its healthcare portfolio in the country.
Investors are banking on CEO Tim Wentworth to steer strategy and cost-saving efforts at Walgreens, as the drugstore operator struggles with declining demand at its retail operations due to reduced spending from inflation-weary consumers and weak COVID product sales.
Wentworth, an industry veteran, came on board last October.
Wentworth commented, “Informed by our strategic review, we are focused on improving our core business: retail pharmacy, which is central to the future of healthcare. We are addressing critical issues with urgency and working to unlock opportunities for growth. Many of these actions will take time, but I am confident that we have the right team and the right strategy to lead a business turnaround for the Walgreens that our customers and patients need.”
Outlook
The company now expects an adjusted profit of $2.80 to $2.95 per share for its financial year ending August, compared with its $3.20 to $3.35 per share forecast in March.
Analysts, on average, expect it to record an annual profit of $3.20 per share, according to LSEG data.
On an adjusted basis, the company reported earnings of 63 cents per share for the third quarter, compared with estimates of 68 cents.
International Business
The company's international generated sales of $5.7 billion (€5.3 billion) in the third quarter, registering an increase of 2.8% compared to the same quarter last year.
Sales increased 1.6% on a constant currency basis, with the wholesale business in Germany growing 4.9% and Boots UK witnessing sales growth of 1.6%.
Boots UK comparable pharmacy sales increased 5.8% on a constant currency basis year on year, comparable retail sales increased 6.0% with growth across all categories with increase in total retail market share.
Boots.com continued to perform strongly with sales growing 13.8%, accounting for 15.6% of Boots total retail sales.
News by Reuters, additional reporting by ESM.
