Walgreens' retail pharmacy USA division posts Q2 sales of $21.8 billion
DEERFIELD, Ill. — Despite gains in prescription marketshare and comparable pharmacy sales across its U.S. base, Walgreens Boots Alliance missed analyst expectations, MarketWatch reported early Wednesday morning, precipitating a slight drop in Walgreens Boots Alliance shares in premarket trading.
“Our results this quarter were in line with our expectations despite some challenging conditions we faced in a number of markets," Stefano Pessina, Walgreens Boots Alliance executive vice chairman and CEO, said. "I am particularly pleased with the growth in pharmacy volume and market share in the retail pharmacy USA division, which saw the highest comparable prescription growth in more than seven years," he said. "At the same time, we continue to work toward gaining regulatory approval of the pending acquisition of Rite Aid Corporation by the end of July, consistent with the amended merger agreement announced in January.”
Walgreens Boots Alliance's retail pharmacy USA division realized second quarter sales of $21.8 billion, an increase of 1.5% over the year-ago quarter. Sales in comparable stores increased 2.4% compared with the same quarter a year ago.
According to MarketWatch, shares dropped 1.1% immediately following Walgreens Boots Alliance report of adjusted earnings per share of $1.36, which came below the FactSet consensus of $1.37. Revenue declined 2.4% to $29.4 billion, for the second quarter of fiscal 2017 ended Feb. 28, missing the FactSet consensus of $30.3 billion.
Pharmacy sales, which accounted for 66.5% of the division’s sales in the quarter, increased 3.7% compared with the year-ago quarter. Comparable pharmacy sales increased 4.2%, primarily due to increased volume. The division filled 246.7 million prescriptions (including immunizations) adjusted to 30-day equivalents in the quarter, an increase of 5.9% over the year-ago quarter.
Prescriptions filled in comparable stores increased 7.9% compared with the same quarter a year ago, primarily due to Medicare Part D growth and volume growth from strategic pharmacy partnerships. The division’s retail prescription market share on a 30-day adjusted basis in the second quarter increased approximately 100 basis points over the year-ago quarter to 20.4%, as reported by IMS Health.
Retail sales decreased 2.7% in the second quarter compared with the year-ago period. Comparable retail sales were down 0.8% in the quarter, in what was a challenging market, with declines in the consumables and general merchandise category and the personal care category partially offset by solid growth in the health and wellness category and the beauty category.
Walgreens Boots Alliance continues to be actively engaged in discussions with the Federal Trade Commission regarding the pending acquisition of Rite Aid, the company noted, and the extension of the end date of the agreement to July 31 allows the parties additional time to obtain regulatory approval.
The transaction is subject to approval by the holders of Rite Aid’s common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. Walgreens Boots Alliance said it continues to expect that it will realize synergies from the acquisition of Rite Aid in excess of $1 billion, to be fully realized within three to four years of the closing of the merger.