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The
largest U.S. drugstore chain by store count said on Tuesday it
would buy rival Rite Aid Corp for $9.4 billion to widen its
footprint in the United States and negotiate for lower drug
costs.
Walgreens in April launched a plan to cut $1.5 billion in costs
by the end of fiscal 2017, which would include store closures
and freezing salary hikes for senior U.S. executives.
Sales at U.S. Walgreens and Duane Reade stores open at least a
year rose 6.4 percent, benefiting from higher purchases per
buyer.
Net income attributable to the company was $26 million, or 2
cents per share, in the fourth quarter ended Aug. 31, compared
with a loss of $221 million, or 23 cents per share, a year
earlier.
Excluding items, Walgreens earned 88 cents per share.
Net sales rose 49.7 percent to $28.52 billion, also helped by
the company's acquisition of Europe's Alliance Boots in
December.
Analysts on an average had expected earnings of 81 cents per
share on revenue of $28.44 billion, according to Thomson Reuters
I/B/E/S.
The company also said it suspended the balance of its $3 billion
share repurchase plan to fund its Rite Aid acquisition.
Walgreens shares were up 0.6 percent at $95.75 in premarket
trading on Wednesday.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Maju
Samuel)
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