--> WAG -1.8% Pre Open - 100k shares traded
Walgreens misses by $0.03, reports revs in-line with pre-announcement; co plan to hold call in late July/early August to discuss next step in Alliance Boots transaction/strategy
Reports Q3 (May) earnings of $0.91 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $0.94; revenues rose 5.9% year/year to $19.4 bln vs the $19.22 bln consensus. (pre-announced $19.49 bln sales on Jun 4).
- Front-end comparable store sales increased 2.2% in the third quarter, customer traffic in comparable stores decreased 0.7 percent and basket size increased 2.9 percent, while total sales in comparable stores increased 4.8 percent.
- Prescription sales, which accounted for 64.4% of sales in the quarter, increased 8.4 percent, while prescription sales in comparable stores increased 6.3 percent.
- The combined synergies for Walgreens and its strategic partner, Alliance Boots, in the first nine months of fiscal 2014 were approximately $367 million. The joint synergy program is now estimated to deliver second-year combined synergies of $400-$450 million, an increase from the previous second-year estimate of $375-$425 million.
- GAAP total gross profit dollars increased $218 million, or 4.2 percent, compared with the year-ago third quarter, with gross profit margins decreasing 40 basis points versus the year-ago quarter to 28.1 as a percentage of sales. Adjusted gross profit dollars increased $139 million, or 2.6 percent, compared with the year-ago third quarter.
- Alliance Boots contributed 15 cents per diluted share to Walgreens third quarter 2014 adjusted results. The company estimates that the accretion from Alliance Boots in the fourth quarter of fiscal 2014 will be an adjusted 6 to 7 cents per diluted share.
- As a result of the many step two considerations and current business performance, the company is withdrawing its fiscal year 2016 goals that were previously announced in 2012. Specifically, once key decisions have been made on the above matters, Walgreens anticipates being in a position to hold an investor call, which is expected to occur by late July or early August. At that time, the company expects to provide a new set of goals and metrics for the proposed combined enterprise for fiscal year 2016.