What happened
Shares of Walgreens Boots Alliance (WBA -1.18%) fell 15.3% in April, according to data from S&P Global Market Intelligence, after the pharmacy retail chain delivered weak fiscal second-quarter 2019 results.
Nearly all of Walgreens' plunge last month came on April 2, the first trading day after its quarterly update hit the wires. Walgreens revealed fiscal Q2 revenue grew 4.6% to $34.5 billion, translating to a 5.4% drop in adjusted earnings per share to $1.64. But both figures fell well below Wall Street's consensus estimates for revenue of $34.6 billion and adjusted earnings of $1.74 per share.
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So what
On one hand, Walgreens insisted it's accelerating its ongoing business transformation, including speeding up partnership initiatives, revamping its front-end retail offerings, "optimizing its store footprint" (read: closing underperforming locations), and boosting its annual cost-savings targets by around 50% to $1.5 billion.
Still, Stefano Pessina, Walgreens' executive vice chairman and CEO, blamed "market challenges and macro trends" for "the most difficult quarter we have had since the formation of Walgreens Boots Alliance."
Now what
Walgreens remains optimistic that it can right its wrongs in the coming quarters, with the aforementioned transformation expected to result in "improved performance" next fiscal year, then mid-to-high single-digit growth in adjusted earnings per share in subsequent years.
Around the middle of last month, Walgreens also followed by holding its quarterly dividend steady at $0.44 per share, extending its more than 86-year dividend-paying streak and assuring long-term shareholders will continue collecting check while they wait for its turnaround to progress.
Given Walgreens' painful performance in the meantime, however, it was hardly surprising to see the market react as it did last month.
