Walgreens names Pessina CEO as profits rise
Walgreens Boots Alliance (WBA) named Stefano Pessina its CEO and raised its full year financial guidance as the drugstore giant reported third-quarter results that beat Wall Street forecasts.
Pessina, the former executive chairman of Europe-based pharmacy chain Alliance Boots, had served as interim CEO since the company completed its merger with Walgreens in December. He succeeded former Walgreens CEO Greg Wasson, who retired with the finalization.
James Skinner, executive chairman of the newly-combined company's board, hailed Pessina 's management of the ensuing transition.
"In Walgreens Boots Alliance's initial six months as a newly combined company, Stefano has done an extraordinary job leading the new enterprise, focusing our strategy while enhancing our financial performance," said Skinner. "The integration of Walgreens and Alliance Boots is proceeding exceptionally well."
Deerfield, Ill.-based Walgreens Boots Alliance reported $1.3 billion in third-quarter profits, or $1.18 a share. The result was up from $714 million, or 74 cents a share, for the same period in 2014. Third-quarter sales revenue totaled $28.8 billion, a 48.4% increase from last year.
Financial analysts surveyed by Thomson Reuters had forecast earnings per share of 87 cents on revenue of $29.62 billion.
The results sent the company's shares up 4.24% to a close of $89.55 in Thursday trading.
The world's largest drugstore chain raised its fiscal 2015 full-year net earnings guidance to $3.70 to $3.80 a share. The company had previously predicted $3.45 to $3.65 a share.
Walgreens Boots Alliance also boosted its quarterly dividend 6.7% to 36 cents a share, up from 33.8 cents.
The upbeat results were driven in part by higher U.S. sales. The company's domestic retail division, which included Walgreens and Duane Reade stores, reported third-quarter sales of $20.4 billion, up 5.3% from last year.
Pharmacy sales at stores open at least one year increased 9.1%, while the number of prescriptions filled increased 4.1%, Walgreens reported.
The company has also moved to cut costs, having previously announced plans for $1.5 billion in reductions. Walgreens Boots Alliance said it completed nine of 200 planned U.S. store closings during the third quarter, with 70 to 80 additional closings planned by the end of the fiscal year.
The company said it expected to achieve at least $1 billion in combined net synergies as its corporate integration continues.
"The fourth quarter is typically the slowest quarter because of the seasonality in the business, while prescription reimbursement pressure continues to impact our pharmacies, making retail margin expansion and cost control as important as ever," said Pessina.