Walgreens Boots Alliance (NASDAQ:WBA) on Tuesday slashed its full-year earnings guidance as it fell short of Wall Street expectations for its fiscal third quarter due to lower consumer spending and a drop in demand for COVID vaccines and testing.
The retail pharmacy chain lowered its earnings guidance to a range of $4.00 to $4.05 per share for the full year, down from its previous forecast of $4.45 to $4.65 per share.
CEO Rosalind Brewer said she is increasing Walgreen’s cost-cutting initiative to $4.1 billion and is taking immediate action to increase profitability in the company’s U.S. health-care segment.
“I am confident that our turnaround strategy positions WBA to drive sustainable core growth and deliver long-term shareholder value,” Brewer said in a statement.
Third-quarter earnings proved $1.00 per share adjusted, vs. $1.07 expected, on revenue of $35.42 billion, vs. $34.24 billion expected.
The earnings miss is the first time Walgreens has underperformed analyst expectations since July 2020.
But the company beat revenue expectations and posted sales growth, booking sales of $35.4 billion in the quarter — 8.6% higher than revenue of $32.6 billion in the same period a year earlier — due to growth in its retail pharmacy and health-care segments.
WBA shares tailed off $2.93, or 9.3%, to $28.66 early Tuesday.
