Walgreens Boots Alliance shares slipped 3 percent in Thursday’s premarket after the retailer’s earnings report showed which fourth-quarter revenue had fallen short, despite a boost by newly acquired stores.
Walgreens reported net income of $1.5 billion, or $1.55 per share, up by by $802 million, or 76 cents per share, a year earlier. Excluding items, Walgreens earned $1.48 per share, above the $1.45 per share expected by analysts surveyed by Refinitiv.
The drugstore chain said revenue rose nearly 11 percent to $33.44 billion, boosted by Walgreens’ acquisition of 1,932 Rite Aid stores. yet sales were shy of the $33.78 billion analysts had expected.
Walgreens’ U.S. retail pharmacy sales increased to $25.5 billion from the quarter, a 14.4 percent increase by last year. Walgreens attributed the increase to prescriptions filled by its acquisition of Rite Aid stores in addition to gains by mail-order pharmacy for specialty drugs. The closely followed same-store sales metric rose just 0.3 percent by the previous year. Stores they operated for the past 12 months saw sales rise just 0.3 percent by the previous year.
For next fiscal year, Walgreens forecast adjusted earnings per share to range by $6.40 to $6.70. Wall Street expects $6.45 per share.
Shares of the company have been essentially flat which year.
Drugstores are rethinking their businesses as Amazon in addition to different e-commerce business have pressured front-of-store sales of everyday items like greeting cards in addition to cleaning supplies. Amazon further pressured pharmacies which summer when announcing which plans to acquire online pharmacy PillPack.
Pharmacy chains are adding more health services to try to keep consumers coming into their stores.
CVS Health can be betting on a roughly $69 billion acquisition of health insurer Aetna, a deal the Justice Department on Wednesday gave preliminary approval. Walgreens can be counting on a slew of smaller partnerships, including with health insurers Humana in addition to UnitedHealth Group’s urgent care business, MedExpress.
On Wednesday, Walgreens in addition to LabCorp announced plans to expand their existing partnership in addition to bring specimen collection sites to at least 0 Walgreens stores. They have already opened 17 locations since June 2017.
Walgreens last week announced plans to partnerwith digital beauty subscription company Birchbox to test a concept in a handful of Walgreens stores where shoppers can fill a kit with makeup, hair in addition to skincare samples. Walgreens sees an opportunity to become a specialist from the beauty category in addition to protect its business by competitors like Amazon.