Shares of Walgreens Boots Alliance plunged Tuesday after it reported weaker-than-expected quarterly earnings, slashing its 2019 forecast after what CEO Stefano Pessina called the “most difficult quarter.”
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The nation’s largest drugstore chain now expects full-year earnings for 2019 to be roughly flat -- compared to its previous guidance of 7 percent to 12 percent growth. Walgreens also said it plans to cut costs by more than $1.5 billion by 2022, instead of its originally anticipated $1 billion.
Shares dropped in premarket trading.
|WBA||WALGREENS BOOTS ALLIANCE INC.||53.22||-0.88||-1.63%|
“The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance,” Pessina said in a statement.
Pessina blamed the lagging sales, in part, on significant reimbursement pressure, compounded by lower generic deflation, in addition to “consumer market challenges” in the U.S. and the United Kingdom.
“While we had begun initiatives to address these trends, our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations,” he said.
Walgreens reported net earnings of $1.2 billion in the second quarter, or $1.24 per share. That’s a 8.3 percent decrease compared to the year-ago period. Adjusted net earnings, meanwhile, fell by 11.5 percent to $1.5 billion, a decline of roughly 11.5 percent.