09:19 AM EDT, 06/27/2024 (MT Newswires) -- Walgreens Boots Alliance ( WBA ) slashed its full-year earnings outlook on Thursday amid "challenging" pharmacy industry trends and a worsening retail environment, as the drug-store operator plans to close some underperforming US stores after quarterly profit missed market estimates.

The company now anticipates adjusted earnings to be in a range of $2.80 to $2.95 per share for fiscal 2024, compared with prior projections of $3.20 to $3.35. The consensus among analysts on Capital IQ is for normalized EPS of $3.22. The stock has slumped 41% year-to-date and extended its plunge with a 20% drop premarket.

"We continue to face a difficult operating environment, including persistent pressures on the US consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins," Chief Executive Tim Wentworth said in a statement. "Our results and outlook reflect these headwinds, despite solid performance in both our international and US healthcare segments."

Adjusted EPS came in at $0.63 for the three-month period ended May 31, down from $1 the year before, missing the Street's view for $0.71. On a constant currency basis, the result dropped 37% annually, reflecting a $0.24 per-share impact from a decline in profit from selling and leasing back assets and softer retail and pharmacy performance.

Sales advanced 2.6% to $36.35 billion for the quarter, topping analysts' $35.93 billion estimate. Revenue in the US retail pharmacy segment rose 2.3% to $28.5 billion, while comparable sales inclined 3.5%. Same-store pharmacy sales climbed 5.7%, benefiting from higher branded drug inflation and script growth, the company said. Retail and comparable sales in the segment declined 4% and 2.3%.

International sales rose to $5.73 billion from $5.57 billion in the prior-year quarter, boosted by a 1.1% benefit from currency. US healthcare revenue improved 7.6% year over year to $2.13 billion, led by the primary-care network VillageMD and the Shields specialty pharmacy business.

Walgreens plans to close some underperforming US stores as part of its strategic review. The drugmaker will also look to align its pharmacy and healthcare divisions for enhanced go-to-market capabilities, as well as simply the healthcare portfolio.

"We are addressing critical issues with urgency and working to unlock opportunities for growth," Wentworth said. "Many of these actions will take time, but I am confident that we have the right team and the right strategy to lead a business turnaround."

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