Walgreens Nears 11-year Lows After Soft Results, Guidance
)
Walgreens Boots Alliance (WBA:US) shares sank as much as 9% on Tuesday after the drug store chain and health care services company reported weaker-than-expected FQ3 profit figures.
Peer CVS Health (CVS:US) also saw its stock open lower on Tuesday in symphony with WBA after the latter’s management noted “challenging consumer and macroeconomic conditions.”
WBA reported adjusted earnings per share of $1.00, missing the analyst target of $1.07. While revenue increased 8.6% to $35.4 billion, it came very close to missing the $34.32 analyst target.
The company’s CEO, Rosalind Brewer, said that “significantly lower demand for COVID-related services, a more cautious and value-driven consumer, and a recently weaker respiratory season created margin pressures in the quarter.”
Given these pressures, the company lowered its adjusted EPS guidance to $4.00 - $4.05 from $4.45 - $4.65. Moreover, WBA has increased its cost-cutting program target to $4.1 billion from $3.5 billion.
“Our revised guidance takes an appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year,” Brewer added.
For the fiscal year 2024, Walgreens expects low-to mid-single-digit adjusted operating income growth.
Given the stock selloff on Tuesday, WBA shares are now down around 25% year-to-date. A few Congress members, including Representatives Ro Khanna, Zoe Lofgren, and Tom Cole, all reported the sale of WBA shares in 2023.
