Walgreens Reports Dismal Q2 Results and Slashes its 2019 Forecast

Pharmacy chain giant Walgreens reported second quarter financial results on Tuesday that didn’t meet expectations.

The company reported that net income dropped 14% to $1.16 billion. Revenue climbed to $34.53 billion. Adjusted earnings per share were $1.64 in the second quarter while analysts expected $1.72 per share on about $34.58 billion in revenue.

Shares of Walgreens Boots Alliance Inc. tumbled nearly 13% to close at $55.36, a multiyear low, while the Dow edged down less than 1%.

“This has been a very disappointing quarter for us,” said Executive Vice Chairman and CEO Stefano Pessina.

Pessina said during the earnings call, “First and foremost, we are acknowledging the short-term headwinds we are facing and the limited time we have available to compensate for the impact in the remainder of the year. As a result, we are reducing our guidance for fiscal 2019.”

According to the CEO, it was the company’s most challenging quarter since it formed more than four years ago.
Walgreens also slashed its 2019 forecast and now expects adjusted earnings per share to be roughly flat this year.

Edward Jones analyst John Boylan said in an e-mail, “While we are disappointed by these negative developments in the drugstore industry as a whole, we also believe that these developments may accelerate industry consolidation because there are many small competitors that likely are feeling the same pressures.”

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