Walgreens loses $1.7B as coronavirus snarls overseas sales
Coronavirus slashed sales by up to $750M
Walgreens Boots Alliance lost $1.7 billion during the three months through May as the COVID-19 pandemic slammed its non-U.S. business.
The Deerfield, Illinois-based drugstore said the virus and related lockdown measures curbed sales by $700 million to $750 million, almost entirely overseas, and that margins were hurt by a shift in consumer preferences and higher supply-chain costs.
“Prior to the pandemic, our financial performance for fiscal 2020 was on track with our expectations,” CEO Stefano Pessina said in a statement. “However, this unprecedented global crisis led to a loss in the quarter as stay-at-home orders affected all of our markets.”
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The fallout from the virus forced Walgreens to take a $2 billion charge due to weakness in its U.K. business, where comparable retail sales slumped 48 percent. Overall, international sales dropped 32 percent year-over-year to $1.9 billion.
Still, revenue in the company's U.S. retail business jumped 3.2 percent to $27.4 billion amid a 3 percent rise in comparable sales.
Walgreens lost $1.95 a share as revenue rose 0.1 percent from a year ago to $34.6 billion. Adjusted earnings were 83 cents a share. Wall Street analysts surveyed by Refintiv were expecting adjusted earnings of $1.17 per share on revenue of $34.4 billion.
Looking ahead, Walgreens sees full-year 2020 adjusted earnings of $4.65 to $4.75 per share. The forecast includes adverse COVID-19 impacts of $1.03 to $1.14 a share. Walgreens expects U.K. sales to remain depressed, but sees a pickup in its American business, based on trends seen in the month of June.
The drugstore's board of directors declared a dividend of 46.75 cents per share, up 2.2 percent, raising the annual payout to $1.87 per share. The board also suspended the company's share-buyback program.
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Walgreens shares tumbled 28 percent this year through Wednesday, worse than the S&P 500's 1.88 percent decline.