May 11, 2021

Walgreens profit misses estimates on pharmacy weakness

2 min read

Drugstore chain Walgreens Boots Alliance Inc posted a 24.8per cent drop in quarterly profit on Wednesday, hurt by higher costs related to its acquisition of stores from rival Rite Aid Corp Net income attributable to Walgreens fell to US$845 million, or 95 cents per share, in the first quarter ended Nov. 30, from US$1.12 billion, or US$1.18 per share, a year earlier. Revenue rose to US$34.34 billion from US$33.79 billion.

FILE PHOTO: A Walgreens pharmacy store sign is photographed in Austin, Texas
FILE PHOTO: A Walgreens pharmacy store sign is photographed in Austin, TX, U.S., March 26, 2018. REUTERS/Mohammad Khursheed/File Photo

REUTERS: Drugstore chain Walgreens Boots Alliance Inc posted a quarterly profit that missed expectations on Wednesday, hurt by lower payments from insurers on drugs sold, sending shares down nearly 4per cent before the bell.

Sluggish retail growth, disappointing performance of Boots U.K. unit and low reimbursement rates for drugs have pushed Walgreens’ shares down 15.3per cent in the last year, making it the worst performer on Dow Jones Industrials Average index .

Sales in the company’s U.S. retail pharmacies missed estimates, despite the company selling more prescription drugs, as continued low reimbursement rates ate into the unit’s profit.

The unit’s sales rose 1.6per cent to US$26.1 billion, missing estimates of US$26.18 billion, according to IBES data from Refinitiv. Gross profit from the unit fell 5.2per cent.

Excluding items, the company earned US$1.37 per share, missing estimates of US$1.41. Net income attributable to Walgreens fell to US$845 million, or 95 cents per share, in the first quarter ended Nov. 30, from US$1.12 billion, or US$1.18 per share, a year earlier. Revenue rose to US$34.34 billion from US$33.79 billion.

(Reporting by Trisha Roy and Manas Mishra in Bengaluru; Editing by Shinjini Ganguli)