What to Expect When Walgreens Reports Thursday

Walgreens Boots Alliance Inc. (NASDAQ: WBA) is scheduled to release its fiscal first-quarter financial results before the markets open on Thursday. The consensus estimates are calling for $1.44 in earnings per share (EPS) and $33.75 billion in revenue. In the same period of last year, the specialty retailer said it had $1.28 in EPS and $30.74 billion in revenue.

In its most recent quarter, the company’s U.S. retail pharmacy division posted an increase of 14.4% year over year. Total same-store sales rose 0.3% in the quarter. Pharmacy sales accounted for nearly three-quarters (73.6%) of the division’s revenue, up 16.7% year over year. The increase was attributed to higher volume resulting from the acquisition of 1,932 Rite Aid stores that was completed earlier this year. Same-store pharmacy sales rose 1.3%, reflecting the higher volume.

At the same time, quarterly U.S. non-pharmacy retail sales dropped by 1.9% year over year, even though total sales were 8.3% higher due to the Rite Aid acquisition. Walgreens noted declines in sales of consumables, general merchandise and personal care products, partially offset by growth in health and wellness and beauty products.

Also, sales in the company’s international retail pharmacy business dropped 1.9% year over year in the fourth quarter and were down 2.7% on a constant currency basis. Same-store pharmacy sales were down 3.4% and retail sales were down 0.9% due to a drop in Boots UK beauty products sales.

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Walgreens has outperformed the broad markets, with its stock up about 5% in the past 52 weeks. In the past six months, the stock is up closer to 17%.

A few analysts weighed in on Walgreens ahead of the report:

• Goldman Sachs has a Sell rating.
• Morgan Stanley has an Equal Weight rating and a $77 price target.
• Pivotal Research has a Hold rating with a $72 price target.
• Barclays has an Equal Weight rating and an $80 price target.
• Robert Bard has a Neutral rating with a $71 price target.
• Citigroup has a Neutral rating with a $76 price target.
• SunTrust Banks has Hold rating with a $75 price target.
• Loop Capital has a Buy rating with an $82 price target.

Shares of Walgreens were last seen trading at $75.81, in a 52-week range of $59.07 to $86.31. The consensus analyst price target is $78.59.

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