Walgreens Just Reported Stellar Earnings But Shares Dropped Anyway

Shares of Walgreens Boots Alliance saw its shares drop 3% on Thursday morning despite reporting earnings and revenues for the first quarter that beat analysts’ expectations.

Traders may have been alarmed by the company revealing struggling sales in Britain, one of the companies biggest markets, and that it plans to cut annual costs by $1 billion within three years.

For the quarter, Walgreens reported earnings per share of $1.46 while analysts waited for $1.43. Revenue at $33.79 billion was also better than the $33.78 billion that was expected.

As for the planned cuts, targets will include global spending, organization and digitalization of the business. The initial focus will be on Walgreen’s biggest markets.

International retail pharmacy sales decreased by 5.9 percent compared to the year ago period. CEO Stefano Pessina said, “Our businesses are used to working in challenging market conditions. But in some of our markets, we have experienced the most difficult trading environment that I can remember. Given these back up, it is a testament to the tenacity and determination of our teams that we have reported increased sales, net earnings and earnings per share. We have continued our work to build on our partnerships in the quarter. We have started some new partnerships and we have begun testing a number of new initiatives.”

“Whether it be three or five [years], it is difficult to say because of these [initiatives] take a lot of time to come to real fruition,” Pessina also remarked.

Disclaimer: We have no position in Walgreens Boots Alliance Inc. (NASDAQ: WBA) and have not been compensated for this article.