Walgreens shares down after soft earnings report

Despite increases in earnings and net income, Walgreens shares dropped this week after the company’s third-quarter earnings fell short of Wall Street expectations.

The company’s adjusted earnings for the quarter increased 29.3% to $812 million, or 85 cents a share. That was 6 cents less than what analysts forecast.

Meanwhile, net income for the quarter jumped 16.2% to $624 million, or 65 cents a share.  Walgreens net income for the same period last year was $537 million, or 62 cents a share. On Tuesday, Walgreens stock dropped nearly 6% and closed at  $45.22. 

“Our front-end sales are still not up to our expectations, and while the economy remains challenging, increasing customer traffic and front-end sales are our near-term priorities with a focus on pricing and promotion and the leveraging of our Balance Rewards program, which now has 75 million members,” said Greg Wasson, Walgreen’s CEO.

Walgreens’ third quarter sales rose 3.2% to $18.3 billion, which included an 8.7% increase in prescription volume. However, the company reported that customer traffic in stores decreased by 3.9%.