7:59 AM, Apr 2, 2019 — Walgreens Boots Alliance (WBA) lowered its full year guidance early on Tuesday as it posted a drop in its second quarter adjusted earnings per share which were impacted by reimbursement pressure and consumer challenges in the US and UK.
The pharmaceutical operator posted fiscal second quarter adjusted earnings of $1.64 per share in the quarter ended February 28, down from $1.73 in the same period a year ago, falling short of the consensus estimate of analysts polled by Capital IQ for $1.72.
Total revenue came in at $34.53 billion, up from $33.02 billion in the same period a year ago but nevertheless below the Street’s projection of $34.57 billion.
It said that the quarter had been its most difficult to date since the formation of Walgreen’s Boots Alliance, highlighting that there had been significant reimbursement pressure, compounded by lower generic deflation, as well as continued consumer market challenges in the US and UK.
“We are going to be more aggressive in our response to these rapidly shifting trends,” Stefano Pessina, chief executive of Walgreen’s Boots Alliance, said. “We are focusing on our operational strengths and addressing weaknesses, making a number of senior appointments to bring change and accelerating the digitalization and transformation of our business”.
Pessina added that this would include expediting the execution of the company’s partnership initiatives and increasing the annual savings goal of its cost management program from in excess of $1 billion to more than $1.5 billion.
Full year adjusted earnings per share growth is expected to be roughly flat at constant currency rates, compared with previous guidance of 7% to 12% growth.
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