Walgreens Posts Higher Sales -- Update
28 Octobre 2019 - 05:02PM
Dow Jones News
By Sharon Terlep
Walgreens Boots Alliance Inc. is getting out of the walk-in
clinic business as it cuts costs and looks to bring in outside
providers to deliver medical services in stores.
The Deerfield, Ill., drugstore chain said Monday it will close
the roughly 160 in-store health clinics the company runs itself,
while keeping 220 clinics that are run by local health systems. It
didn't provide an estimate for the financial impact.
Walgreens and rival CVS Health Corp. both want become treatment
centers for chronically ill patients as a way to offset slowing
revenue from prescription drugs and competition from online
retailers.
They are taking different approaches. Walgreens has increasingly
sought partnerships with other companies and health systems, while
CVS is making the shift through acquisitions or by building its own
new business.
Walgreens's roughly 400 walk-in clinics and CVS's 1,000 Minute
Clinic locations have long either proven unprofitable or barely
broken even for both companies. The goal for both is to shift away
from treating minor or acute issues and to provide services for
more people with chronic conditions such as diabetes, heart disease
and hypertension.
The chains say their vast networks, the ease of access and the
data they collect on pharmacy customers will enable them to help
people with chronic disease and comply with their treatment plans.
The Centers for Disease Control and Prevention estimates that
chronic conditions account for roughly 90% of the nation's $3.3
trillion in annual health-care spending, much of it for in-hospital
care.
The news came as Walgreens, which also owns the Boots chain
outside the U.S., posted a 55% drop in quarterly profit, hurt by
restructuring charges. The company reported a profit of $677
million, or 75 cents a share, for the fourth quarter, ended Aug.
31, compared with $1.51 billion, or $1.55 a share, a year
earlier.
Revenue grew 1.5% to $33.95 billion. U.S. retail pharmacy sales
were up 2% to about $26 billion.
The company said retail sales are taking a hit as the chain
takes steps to pare back sales of tobacco products. Comparable
retail revenue fell 1.2% in the most recent quarter, due entirely
to lower tobacco sales, the company said.
Walgreens this spring raised the minimum tobacco-buying age to
21 amid criticism from federal regulators that the company was
among the worst offenders of selling cigarettes to minors. Earlier
this month, Walgreens stopped selling electronic cigarettes, citing
regulatory uncertainty and investigations into potential health
effects. CVS stopped selling tobacco products in 2014.
For fiscal 2020, Walgreens said it expects roughly flat adjusted
earnings growth at constant currency rates, with a range of plus or
minus 3%.
Write to Sharon Terlep at sharon.terlep@wsj.com
(END) Dow Jones Newswires
October 28, 2019 11:47 ET (15:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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