Walgreens posted second quarter results in line with its expectations while the company expressed optimism that its pending acquisition of Rite Aid will be approved in July.
For the second quarter ended February 28, a period characterized as “challenging,” Walgreen Boots Alliance posted company net earnings of $1.06 billion, or 98 cents per diluted share, versus $930 million, or 85 cents per diluted share, in the period a year before.
Adjusted company net earnings were $1.48 billion, or $1.36 per share, as compared to $1.42 billion, or $1.31 per diluted share, in the year-previous quarter. Adjusted earnings per share matched a MarketBeat published analyst average estimate.
Net sales were $29.45 billion versus $30.18 billion in the period a fiscal year earlier. Operating income was $1.48 billion versus $1.86 billion in the quarter a year past.
In the Walgreens Boots retail pharmacy USA division, second quarter sales increased 1.5% to $21.8 billion while comparable stores increased 2.4% year over year. Comparable retail sales, which exclude pharmacy results, slipped 0.8% in the quarter versus the period in the year prior, with declines in the consumables and general merchandise and personal care categories having a negative impact partially offset by solid growth in the health and wellness category and the beauty category. Pharmacy comps advanced 4.2%.
The company’s merger agreement with Rite Aid is still pending approval. Walgreens Boots noted that it had entered into an amendment and extension of its merger agreement with Rite Aid Corp., a deal that the parties made public in 2015, as the two companies continue to engage with the United States Federal Trade Commission. The extension allows the parties additional time to obtain regulatory approval for their merger.
“Our results this quarter were in line with our expectations despite some challenging conditions we faced in a number of markets,” said Walgreens Boots executive vice chairman and CEO Stefano Pessina. “I am particularly pleased with the growth in pharmacy volume and market share in the retail pharmacy USA division, which saw the highest comparable prescription growth in more than seven years. At the same time, we continue to work toward gaining regulatory approval of the pending acquisition of Rite Aid Corp. by the end of July, consistent with the amended merger agreement announced in January.”
