Walgreens Boots Alliance, one of the largest drugstore and pharmacy chains in the USA, is facing challenges in the first business quarter, which ended in November. As announced by the company from Deerfield on Thursday, adjusted earnings have decreased by 43 percent compared to the same period last year, reaching 0.66 US dollars per share. Consumer sentiment is cautious and a higher tax rate is also burdening the company.
Despite these difficult circumstances, Walgreens Boots Alliance exceeded analysts' expectations. The company incurred significant impairments on financial instruments and ended the quarter with a net loss of $67 million (€61.3 million). In the previous year, the loss amounted to one billion dollars due to costly settlements related to the distribution of opioid painkillers.
The company's stock has lost 62 percent of its value since its highs in December and is now approaching an important support level. If this level is breached, the chart pattern is likely to deteriorate further. Additionally, the stock is currently testing the 50-day moving average, an indicator for the medium-term trend.
The difficult retail environment in the USA also has an impact on shareholders of Walgreens Boots Alliance. The company has cut its quarterly dividend in half. This decision overshadows the otherwise confirmed annual forecast of the company. According to analyst Kevin Caliendo of the Swiss bank UBS, the dividend cut comes as a surprise. In addition, the operating capital has performed poorly, which also affects the free cash flow.
