Walgreens Stock Slides After Q3 Earnings Miss, Sharply Lower 2023 Profit Forecast

Updated at 7:46 am EDT

Walgreens Boots Alliance  (WBA) - Get Free Report published weaker-than-expected third quarter earnings Tuesday, missing Wall Street forecasts for the first time in three years, and slashed its full-year profit forecast citing softer consumer spending.

Walgreens Boots said adjusted earnings for the three months ending in May, the company's fiscal third quarter, came in at $1.00 per share, up 4.2% from the same period last year but 7 cents ahead of the Street consensus forecast. Group revenues, Walgreens said, rose 8.7% from last year to $35.42 billion, topping analysts' forecasts of a $34.25 billion tally, as U.S. same-store pharmacy sales rose 7%.

Looking into the current fiscal year, Walgreens said it sees adjusted earnings in the region of $4.00 to $4.05 per share, down from its prior forecast of $4.45 to $4.65 per share issued earlier this year, 

"Significantly lower demand for COVID-related services, a more cautious and value-driven consumer, and a recently weaker respiratory season created margin pressures in the quarter," said CEO Rosalind Brewer. 

"Our revised guidance takes an appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year," she added. "We are raising our cost savings program target to $4.1 billion and taking immediate actions to optimize profitability for our U.S. Healthcare segment."

Walgreens Boots Alliance shares, a Dow component, were marked 6.8% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $29.35 each, a move that would extend the stock's year-to-date decline to around 22%