Boots parent Walgreens misses sales targets

The new parent of chemist chain Boots got off to a mixed first quarter, beating earnings forecats but missing sales targets.

Walgreens Boots Alliance lifted adjusted first quarter net earnings 30.6% to $1.1bn compared to the same period a year before, with earnings per share up to $1.01 from 89 cents.

Net sales rose 48.5% to $29.03bn, boosted by the Boots acquisition, but the Reuters-compiled consensus of analyst forecasts was for more than $29.2bn.

Stefano Pessina, the executive vice chairman and chief executive, said: "The year has started with a comparatively strong first quarter, as we expected. Our ongoing work to control costs across Walgreens Boots Alliance and improve adjusted operating income margins is growing earnings overall."

Although early in the year, Pessina was confident WBA was on track to hit full year expectations, with the proposed acquisition of Rite Aid "progressing as planned" ahead of a vote by the target's shareholders on 4 Febuary.

The deal will vault the group to number one in terms of market share in the US, growing from 19% to 26%, and broker Jefferies said the pending deal could be $0.63 accretive to EPS by full year 2019 with another $0.30 in turnaround potential.

The transaction is expected to clear antitrust approvals, but the enlarged group might need to divest almost 800 stores to keep local market shares at an acceptable level.