Walgreens Boots Still Sees Rite Aid Deal Closing by July

By Joshua Jamerson 

Walgreens Boots Alliance Inc.'s pharmacy business picked up in the U.S. in the latest period with the highest quarterly prescription growth in years, but reported revenue fell more than Wall Street anticipated.

The company offered no new information regarding its much-watched tie-up with Rite Aid Corp., saying the deal was on-track to close by its extended timeline of the end of July.

Comparable pharmacy sales increased 4.2% on higher volume, as prescriptions filled in comparable U.S. stores increased 7.9% compared with the same quarter a year ago, which the drugstore operator said was its highest growth in more than seven years. Walgreens attributed the results to the expansion of the Medicare Part D program as well as its pharmacy partnerships.

Meanwhile, comparable retail sales fell 0.8% amid what the company called "a challenging market," hurt by declines in the consumables and general merchandise category and the personal care category partially. Those segments offset growth in the health and wellness category and of beauty products.

Walgreens stock, which has fallen 1% from over the past 12 months, fell another 1.1% to $81.56 in premarket trading.

Investors have been awaiting the delayed tie-up between drugstore chains Walgreens and Rite Aid, and have grown increasingly uneasy that the deal, heavily scrutinized by regulators, could fall apart. Among the antitrust concerns, the resulting drugstore giant -- which would challenge CVS Health Corp. -- would be able to bully pharmacy-benefit managers steering corporate and government drug plans. The deal was originally unveiled in October 2015.

Over all, for the period that ended Feb. 28, Walgreens earned $1.06 billion, or 98 cents a share, compared with $930 million, or 85 cents a share, in the year-ago period, as sales fell 2.4% to $29.4 billion. Excluding certain items, the company said it earned $1.36 a share, in line with the consensus estimate by analysts polled by Thomson Reuters. Analysts expected $30.18 billion in revenue.

Walgreens, which backed its fiscal 2017 outlook of adjusted per-share earnings in a range of $4.90 to $5.08, also detailed a $1 billion share buyback program.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

April 05, 2017 08:03 ET (12:03 GMT)

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