Retailing giant Walgreens Boots Alliance (WBA) posted its second-quarter 2019 earnings before the bell on Tuesday, April 2.
For the quarter, sales inched 4.6% higher to $34.5 billion, while operating income slumped 23.3% to $1.5 billion.
Earnings fell 8.3% year-over-year to $1.24 per diluted share, while adjusted EPS slipped 5.4% to $1.64 in the same period.
For fiscal 2019, Walgreens now sees adjusted EPS growth to be roughly flat at constant currency rates, way lower than previous guidance of 7-12% percent growth.
“The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance,” stressed CEO Stefano Pessina.
“During the quarter, we saw significant reimbursement pressure, compounded by lower generic deflation, as well as continued consumer market challenges in the U.S. and UK. While we had begun initiatives to address these trends, our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations. As a result, we are now expecting roughly flat adjusted EPS growth for fiscal 2019,” he added.
Net cash provided by operating activities in the second quarter was $735 million, while free cash flow amounted to $411 million.
Sales rose 7.3% at its Retail Pharmacy USA segment to hit $26.3 billion in the second quarter — excluding the benefit from acquired Rite Aid stores, organic sales growth was merely 1.6% year-over-year.