Walgreens Boots Alliance (WBA) ends 2019 on a strong note, raises cost-savings target

For the final quarter of 2019, Walgreens Boots Alliance (NASDAQ: WBA) posted results that edged past the estimates, thanks to a modest recovery seen by the US retail pharmacy unit.

Q4 sales increased 1.5% to $33.95 billion, vs. $33.89 billion expected by the street. It’s biggest segment, Retail Pharmacy USA, reported 2.1% growth in sales and 3.4% growth in comparable sales, helped by higher prescription volume.

Weakness in international markets continued to hurt the top-line, where fourth-quarter sales decreased 6.3% to $2.7 billion.

Down the line, adjusted earnings for the quarter came in at $1.43 per share, a decline of 3.7% compared to last year. However, this was 2 cents higher than what the street expected.

WBA shares rose 1.6% during pre-market hours on Monday.

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For fiscal 2020, the Deerfield, Illinois-based firm said it currently expects roughly flat growth in fiscal 2020 adjusted EPS. Walgreens also raised its annual cost savings target from over $1.5 billion to over $1.8 billion by fiscal 2022.

CEO Stefano Pessina said, “While we still face headwinds, I am encouraged by the improvement in U.S. comparable sales performance in the second half of fiscal 2019 and our progress in managing costs in order to save to invest to grow.”

A few months ago, Walgreens shares had plunged to a six-year low and has maintained the downtrend since then. In the past twelve months, the stock lost about 29%, while the healthcare sector and the general market registered strong growth.

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