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Walgreens shares surge on upbeat Q2 results

Friday, March 29, 2024

Today’s headlines

What’s happening: Shares of Walgreens Boots Alliance gained on Thursday, after the company released results for its fiscal second quarter.

What happened: The pharmacy chain reported better-than-expected sales and earnings for its latest quarter on Thursday.

However, Walgreens tightened its earnings outlook and booked a significant charge on its investment in clinic operator VillageMD.

How were the results: The Deerfield, Illinois-based company reported a single-digit increase in sales for the quarter ended February 29.

  • Sales grew by 6.3% year-over-year to $37.1 billion, topping the consensus estimates of $35.86 billion.
  • Adjusted earnings rose 3.4% to $1.20 per share, surpassing Wall Street expectations of 82 cents per share.

Why it matters: Walgreens Boots Alliance had raised its stake in VillageMD from 30% to 63% in 2021, by making an investment of $5.2 billion.

Walgreens posted a net loss of approximately $6 billion for the second quarter, with the company poured billions of dollars into VillageMD. The company took an impairment charge of $5.8 billion related to its VillageMD business during the latest quarter.

The company said that it had shut down 140 clinics to date and is looking to close another 20 clinics.

Walgreens reported a 26.5% decline in its adjusted operating income to $900 million for the second quarter, amid soft retail performance in the US.

The company’s US Retail Pharmacy segment’s sales grew by 4.7% year-over-year to $28.9 billion. Pharmacy sales surged 8.2% year-over-year. Total prescriptions filled, including immunisations, increased 2.6% to 305.7 million in the quarter.

Its retail sales contracted by 4.5%, while comparable retail sales declined 4.3% due to a weaker respiratory season and challenging retail environment.

Management narrowed their adjusted earnings forecast for fiscal 2024 to $3.20-$3.35 per share, from $3.20-$3.50 per share, amid economic challenges in its retail business.

How shares responded: Shares of Walgreens gained 3.2% to close at $21.69 on Thursday, following the release of quarterly results. The stock has lost around 19% year-to-date.

What to watch: Investors will continue monitoring the VillageMD business, which is expected to significantly impact Walgreens’ overall results ahead.

The markets today

Bitcoin will be in focus today after recording gains on Thursday

Context: Bitcoin prices moved higher on Thursday, but remained close to the range within which it has been trading through the week.

Details: After surging to record highs earlier this month, the world’s largest cryptocurrency has remained rangebound for around two weeks. Bitcoin once again breached the $70,000 mark on Thursday but receded later in the day.

Strength in the US dollar, which jumped to one-month high this week, limited the overall gains in cryptocurrencies. Dovish remarks from the biggest central banks around the world have resulted in investors shifting their focus to major currencies.

Investors have been closely monitoring economic reports from the US and statements by Federal Reserve officials to get further insights into the central bank’s upcoming rate move. Markets widely expect the Fed to begin cutting interest rates in June and lower the benchmark rate by 75 basis points this year.

On Wednesday, Federal Reserve Governor Christopher Waller said that the central bank was in no hurry to begin cutting rates due to sticky inflation.

Bitcoin prices climbed by 1.9% to $70,765 on Thursday, while Ethereum also made gained of around 1.5%.

What to watch: Investors await the release of data on core PCE price index, the US Federal Reserve’s preferred gauge to measure inflation, scheduled to be released today. The US core PCE price index, which increased by 2.8% year-over-year in January, is expected to rise at the same pace in February.

Concerns over further regulatory scrutiny against cryptocurrencies will also remain in focus.

Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.26%, 0.08%, 0.01% and 0.18%, respectively.

The news shaping the markets

During an extraordinary meeting of the NATO-Ukraine Council, Ukraine’s defence minister asked allies for further air defences. The news sent the RUB/USD pair lower in forex trading this morning.


Vietnam’s GDP grew by 5.66% year-over-year in the fourth quarter, slower than the 6.72% surge in the prior quarter, exerting pressure on the VND/USD forex pair.


Japan’s retail sales grew by 4.6% year-over-year in February, versus a 2.1% rise in January. The latest reading also topped market expectations of a 3% surge and sent the JPY/USD pair higher in forex trading this morning.


South Korea’s industrial production rose by 3.1% in February, after a 1.5% decline in the prior month, which lent support to the KRW/USD forex pair.


The University of Michigan consumer sentiment for the US rose to 79.4 in March, from a preliminary level of 76.5, which sent the Dow Jones index higher by around 0.1% on Thursday.

What else to watch today

Turkey’s balance of trade, France’s inflation rate and producer price inflation, China’s current account, Italy’s inflation rate, India’s foreign exchange reserves, US personal income, personal spending, goods trade balance and wholesale inventories, as well as Russia’s money supply M2.


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