Walgreens Boots Alliance Inc (NASDAQ: WBA) stock fell 6.30% on April 2nd, 2020 (Source: Google finance) and continued its bearish momentum falling over 0.7% on April 3rd, 2020 (As of 10:49 am GMT-4; Source: Google finance). The company’s second quarter ended before the number of COVID-19 cases in the U.S. rose significantly and changed customers’ shopping patterns. The company saw increased demand in the final days of the quarter tied to the coronavirus outbreak, but said it did not have a material impact. In the second quarter ended Feb. 29, net income fell to $946 million from $1.16 billion, a year earlier.
WBA in the second quarter of FY 20 has reported the adjusted earnings per share of $1.52, beating the analysts’ estimates for the adjusted earnings per share of $1.46, according to analysts by Refinitiv. The company had reported the adjusted revenue growth of 35.9 percent to $35.82 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of $35.27 billion. In the second quarter, sales at Walgreens’ U.S. retail pharmacy business grew 3.8% to $27.2 billion over the year-ago period. Excluding the impact of leap day, same-store sales increased 2.7% from last year.
Moreover, the company attributed the Pharmacy sales growth to the larger number of prescriptions it filled and higher drug prices. Same-store pharmacy sales grew 3.7%. Prescriptions filled in comparable stores were up 4.9% from a year ago. For nonpharmacy products, same-store sales rose up by 0.6% in the second quarter compared to a year prior. The company attributed the slight growth of these products to sales of health and wellness products during a busy cough, cold and flu season. Excluding tobacco and e-cigarettes, same-store sales of nonpharmacy products rose 1.9%.
Meanwhile, the company is in the middle of a major cost-cutting effort. It projects to have more than $1.8 billion in annual cost savings by fiscal 2022, a plan that the company is still on track. The company has laid off an undisclosed number of employees last year at its Deerfield, Illinois headquarters. It also said that it intends to close 200 stores in the U.S. and 200 stores in the United Kingdom.
On the other hand, during the COVID – 19 pandemic, Walgreens has made changes to make it easier for U.S. customers to buy essential items while socially distancing. The customers can now purchase more than 60 popular items, such as cleaning supplies, cough and cold medications and formula, at its more than 7,300 pharmacy outlet in the U.S.