Walgreens outlook positive as company prepares for another 'milestone' year

DEERFIELD, Ill. — Shares of Walgreens were up about $1.50 to more than $61 per share as the market opened Tuesday morning following the company's fourth-quarter earnings call. The tone of the conference call was positive, reflecting the outlook for the company in fiscal 2015. "Overall the [fourth] quarter have met our expectations and closed down a challenging, important and historic year for Walgreens," Greg Wasson, Walgreens president and CEO told analysts. "We recognize we have more to do, as fiscal '15 is another milestone year for our company."

 

(For full financial results, see Walgreens reports $76.4 billion in annual sales, up 5.8%)

 

Looking forward, Walgreens is well positioned to take advantage of industry tailwinds, Wasson said. Specifically, Walgreens expects to expand its offerings to an aging population, serve more patients with chronic conditions, capitalize on the consumerization of healthcare, improve its generic penetration and meet a growing demand for a personalized shopping experience. 

 

"With our suite of healthcare services and team of professionals in our communities, with our approach to omnichannel access and the strength of our loyalty program, and most important, the potential of a strategic partnership with Alliance Boots, we are positioned well to serve the needs of a changing customer and industry," Wasson said. 

 

Walgreens is also prepared against industry headwinds expected in 2015, Wasson said. "We are realistic about the headwinds we face for the year," he said. Wasson identified a cautious consumer, ongoing reimbursement pressure, generic drug inflation and significant step-downs from Medicare Part D reimbursement rates as the headwinds facing the company in the coming year. "The market reality certainly creates a challenge for us in fiscal 2015, but one that we understand, accept and are driven to meet."

 

Looking back, Walgreens reached several significant milestones through fiscal 2014. The company's Well Experience store formats now total 750 with another 1,000 to come in fiscal 2015. "These formats offer more innovative health and wellness products and solutions, provide a private consultation room to receive health services and speak to your trusted pharmacist and offer personal care on everyday items our customers value," Wasson said. 

 

And Walgreens now fields 14 flagship locations across nine major markets. Walgreens' flagship locations help capture the company's front-end aspirations as the Chicago retailer reshapes the drug store shopping experience. "These flagships, along with our Well Experience stores, bring a real vibrancy to our markets and build awareness of our brand," Wasson said.