Walgreens Boots Alliance has today reported better-than-expected profit for the first quarter on strength in its pharmacy operations and also said it would cut its quarterly dividend in an attempt to save cash.
Walgreens said it will cut its dividend payment by 48% to 25 cents per share.
Walgreens has been shifting its focus to integrated health services and closing unprofitable stores as well as cutting jobs as it struggles with competition from rivals, sharply lower sales from Covid vaccines and testing, and decreased discretionary spending by inflation-weary consumers.
The company appointed healthcare industry veteran Tim Wentworth in October as its CEO, as it looks to emerge out of the troubles surrounding it and streamline its operations.
On an adjusted basis, the company reported earnings of 66 cents per share for the quarter, compared with the average analyst estimate of 61 cents per share, according to LSEG data.
Meanwhile, Boots reported a strong retail sales performance in the first quarter, with sales rising by 9.8% year on year, on top of the 8.7% increase in the prior year.
Boots.com sales were up 17.5% year on year, contributing 19.2% of sales for the quarter.
The pharmacy chain noted that Black Friday was a key contributor to its strong performance.
Boots.com achieved its biggest ever month of sales for November and its biggest ever day of sales on Black Friday with in-store sales increasing 8% across Black Friday week.
It noted that a bottle of fragrance was sold every second during the Black Friday week.
Boots said its Christmas sales performance will be reported on in its second quarter earnings later this year, but added that early indications suggest a strong Christmas period with sales from Black Friday week until the New Year beating last year's performance.
