By Walgreens Boots Alliance Inc. saw a significant dip in its stock value at 6.1% towards an 11-year low during premarket trading on Tuesday following the company’s report of missed earnings and a reduced full-year outlook. The drug store chain and healthcare services company attributed “challenging consumer and macroeconomic conditions, and lower COVID-19 vaccine and testing volumes” as the culprit of their sluggish Q3 performance.
The company’s net income this quarter ending May 31 fell from $289 million, or 33 cents a share, to $118 million, or 14 cents per share. Furthermore, it missed the FactSet consensus of $1.07 with its adjusted earnings per share of $1.00, citing the “challenging consumer and macroeconomic conditions” as contributing factors.
The Q3 sales did see an increase of 8.6%, generating $35.42 billion compared to the FactSet consensus of $34.32 billion. The positive sales momentum came primarily from the company’s US Healthcare business, however, this was overshadowed by the decline in earnings per share.
For fiscal year 2023, Walgreens Boots Alliance cut its adjusted EPS guidance to $4.00 to $4.05 from $4.45 to $4.65. The company has opted to mitigate this by increasing its cost-cutting program target to $4.1 billion from $3.5 billion, as it cuts capital and project spending.
The company’s stock has seen a notable 15.4% decline year-to-date through Monday, while the Dow Jones Industrial Average saw a gain of 1.7%.
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