Walgreens (WBA) posted better-than-expected third quarter earnings Wednesday, while booking a $683 million charge linked to an opioid settlement with the state of Florida, amid weakening comparable sales for its U.S. pharmacy division.
Walgreens Boots said adjusted earnings for the three months ending in May, the company's fiscal third quarter, came in at 96 cents per share, down 30.4% from the same period last year and 4 cents ahead of the Street consensus forecast. Group revenues, Walgreens said, fell 4.2% from last year to $32.6 billion, again topping analysts' forecasts of a $32.06 billion tally.
Walgreens said U.S. sales fell 7.1% on a quarter-to-quarter basis, to $26.7 billion, while comparable sales were down 1.8% from the same period last year.
The drug store chain, which earlier this week said it would retain ownership of its U.K. operations Boots after failing to find a buyer for the $10 billion division, reiterated its fiscal 2022 profit forecast, which sees adjusted earnings growth in the 'low single-digit' percentage range.
"WBA delivered strong execution across operating segments and against very robust growth last year. Third quarter results were broadly in line with our expectations, demonstrating the resilience of our business through our deep community connections and relevance to consumers," said CEO Rosalind Brewer. "Walgreens Health achieved 65% pro forma sales growth with progress on several fronts, including adding Buckeye Health Plan as a strategic partner, already exceeding our 2022 target for covered lives, and launching our clinical trials business."
"With our decision to conclude the Boots strategic review, I firmly believe that our strategic actions are working to deliver long-term shareholder value," she added.
Walgreens shares, a Dow component, were marked 4.5% lower in early trading afternoon trading following the earnings release, against a 0.45% decline for the benchmark, to change hands at $39.01 each.
Walgreens said earlier this week that it had held a number of "productive discussions" in terms of the sale, but noted that "as a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value" of either Boots nor the No7 Beauty company.
The 173-year old Boots, whose 2,200 stores are a mainstay on British high streets, was taken in by Walgreens in 2014 for around £9 billion, but effectively put on the block earlier this year when the group unveiled plans for a strategic review of its U.K. business.
