Walgreens Shares Get Booted
Stock the hour. It's Walgreens Boots Alliance. The stock is falling is announced. It's gonna have to have some layoffs, and he's gonna do some stock buybacks at the same time. Scarlett Fu is here for a full report. Scarlett Yeah, David Walgreens, says the worst performer in the Dow and the NASDAQ 100 losing as much as 10% of its value. Today. The latest earnings report showed a loss for the fiscal third quarter. Net sales were flat and gross margin declined as well. The full year outlook. Came in better or I should say worsen, expected disappointing investors. If you were to look at the vent diagram of where Walgreens fits in. It's basically in the middle between healthcare and retails on the front lines of disruption from Cove it and longer term changes in how consumers behave. So rivals like CVS Health are focusing on health care will has a friend ofthe Amazons pharmacy ambitions. You look at the UK In particular. It contributes the bulk of the pretax profit even though it doesn't come in as much when it comes to revenue and in the UK was where things really fell apart. Traffic plunged 85% April because of the Lock down and that led to a $2 billion charge. David So what about back here in United States? I mean, this was a critical element that we all could go to our drug stores. No matter what, So you think they might have done better here they did to better comparable sales rose 3% as people rushed to stock up on prescriptions. But there's a divergence based on whether it's in the urban market or rule market. We saw urban market sales dropped 18% and in the rule markets sales rose 8% so big big split there. No matter where the stores were located, the Walgreens spent more to clean stores and to pay employees you could see that costs increase and that led to a squeeze in margins for the period. Soto address that, as you mentioned, it's going to suspend stock buy backs. No change was dividend. Walgreens has a pretty juicy dividend yield a 4.9% which is better than CVS. And over in the UK, where foot traffic dropped so much. It's going to cut around 4000 jobs and says retail conditions there will remain pretty depressed. For the rest of the summer.