Walgreens Boots Alliance Inc (NASDAQ:WBA) has reported first-quarter sales that beat expectations, sending its shares higher in Thursday premarket trading.
The company, which is reported to be exploring a spinoff of its UK-based Boots drugstore chain, posted a 10% increase in sales to $36.7 billion for the three months to November 30, 2023, above the $34.9 billlion expected by analysts polled by Zacks Investment Research.
Adjusted earnings per share (EPS) fell 43% to $0.66, in line with consensus expectations. It attributed the decline to challenging retail market trends in the US and a 21 percentage point headwind from a higher tax rate.
It cuts its quarterly dividend by 48% to $0.25 per share.
"WBA delivered fiscal first quarter results in line with overall expectations, reflecting disciplined execution in a challenging consumer backdrop,” CEO Tim Wentworth commented in a statement.
“We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow, with a balanced approach to capital allocation priorities.
The company has maintained its fiscal 2024 adjusted EPS guidance of $3.20 to $3.50, with underlying earnings growth more than offset by lower sale and leaseback contribution, a higher tax rate, and lower COVID-19 contribution.
Its shares traded 3.8% up at $26.55 ahead of the opening bell.