Stock price falls when stop buyback, profit loss

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  • Walgreens halted its share buyback program and said it planned to cut 4,000 jobs after reporting worse-than-expected third-quarter numbers.
  • The pharmaceutical giant lost $1.95 per share over the period, or $1.71 billion in total.
  • The company’s Boots UK division saw same-store sales fall 48% during the period as quarantine orders “forced consumers to consolidate purchases at grocers”, Walgreens said.
  • Shares of the drugstore chain traded as low as 5.1% early Thursday on the news.
  • Watch the Walgreens trade live here.

Walgreens took steps to boost its results on Thursday after the coronavirus ravaged third-quarter profits.

The drugstore chain reported a net loss of $1.95 per share over the three-month period, for a total net loss of $1.71 billion. Adjusted earnings per share came in at 83 cents, still below the $1.19 per share analysts expected, according to Bloomberg.

Walgreens will suspend its share buyback program and cut 4,000 jobs in response to collapsing profits. The cuts affect around 7% of the company’s workforce.

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Walgreens shares fell 5.1% in early trading. Shares closed at $42.29 each on Wednesday, down about 28% year-to-date.

“Prior to the pandemic, our financial performance for fiscal year 2020 was in line with our expectations. However, this unprecedented global crisis resulted in a loss in the quarter as stay-at-home orders affected all of our markets,” said the CEO Stefano Pessina in a statement.

Prescription fills fell 1.3% year-over-year, the pharmacy chain said, attributing the decline to lower hospital visits amid nationwide shutdowns. ‘State.

Same-store sales in the United States increased 3% over the period. Strong demand for vitamins and personal protective equipment led to a 9% increase in sales of health and wellness products. Personal care sales increased 5%. Weaker demand for discretionary products caused beauty sales to fall 9%.

International performance has deteriorated overall. Sales fell 31.5% in the quarter to $1.9 billion.

The underperformance of the company’s Boots UK sites was a major contributor to the success. Comparable sales fell 48% as quarantine orders “requiring consumers to consolidate purchases at grocers,” Walgreens said. Operating losses at its international pharmacies reached $2.2 billion, mostly fueled by a $2 billion impairment charge.

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