Walgreens posts Q3 gains, misses analyst expectations
Deerfield, Ill. – Walgreens posted gains in sales and earnings during its fiscal third quarter 2013, but still came in below the expectations of Wall Street analysts. Earnings rose 16% to $624 million from $537 million in the third quarter of fiscal 2012. However, excluding certain items, analysts had expected earnings of close to 30 cents a share higher for the quarter.
Similarly, while Walgreens posted quarterly sales of $18.3 billion, up 3.2% from $17.7 billion a year earlier, analysts had predicted an average figure of $18.43 billion. Same-store sales rose 1.4%, with customer traffic declining 3.9% but average basket size increasing 4.4%.
Greg Wasson, CEO of Walgreens, cited strong pharmacy performance, cost control and the positive impact of taking a major stake in U.K. drug chain Alliance Boots as helping to spur growth, but also said challenges remain.
“Front-end sales are still not up to our expectations, and while the economy remains challenging, increasing customer traffic and front-end sales are our near-term priorities with a focus on pricing and promotion, and the leveraging of our Balance Rewards program, which now has 75 million members," Wasson said.
During the third quarter, Walgreens also set aside $25 million to help pay a total of $80 million in fines related to its failure to follow federal guidelines for reporting the distribution of prescription painkillers from a center in Florida.