Shares of Walgreens Boots Alliance dropped slightly in pre-market trading on Thursday following the release of their second-quarter earnings report. The company surpassed Wall Street expectations, but highlighted a challenging retail environment. Despite the stock falling by 2%, it has experienced a decrease of over 20% since the beginning of the year.
CEO Tim Wentworth acknowledged the tough retail landscape that Walgreens is navigating. Although the company outperformed analyst predictions with $37.05 billion in revenue and $1.20 earnings per share, they reported a loss of $5.91 billion due, in part, to the closure of primary care provider VillageMD locations.
Walgreens has grappled with issues like high inflation and dwindling reimbursement rates from pharmacy-benefit managers. Wentworth, who took over the company after working at Cigna, emphasized the ongoing restructuring efforts that have been a priority during his tenure. In February, Walgreens was removed from the Dow Jones Industrial Average and replaced by Amazon.
The pharmacy chain has made operational changes to improve its financial health, such as closing distribution centers in Florida and Connecticut. Additionally, they reduced their stock dividend in order to focus on investing in their pharmacy and healthcare services. Walgreens revised its full-year earnings guidance to be between $3.20 and $3.35 per share.