America’s largest drugstore chain, Walgreen, reported a loss of $239 million in its fiscal fourth quarter.
The loss stems from the company’s massive accounting charge from its Alliance Boots acquisition. Walgreen reported a non cash loss of $866 million (90 cents per diluted share) on the amendment and exercise during the quarter of the company’s Alliance Boots call option.
The Deerfield, Illinois-based company reported that it had a loss of 25 cents per share. Earnings, adjusted for non-recurring costs and amortization costs, were at 74 cents per share. This compares to a profit of $657 million (69 cents per share) in the same quarter last year.
According to Zacks Investment Research, the results met what most analysts in Wall Street had forecast.
Walgreen reported GAAP net revenue for the fiscal year of $1.9 billion, with sales from stores increasing by 5 percent. Revenue in fiscal 2013 was $2.5 billion. However, adjusted net earnings for fiscal 2014 was $3.2 billion, up by 6.1 percent compared to the adjusted net earnings of $3.0 billion the year before.
Greg Wasson, CEO of Walgreen, said:
“Our fourth quarter performance was in line with our expectation, recognizing we have much more to do. We closed the fiscal year by exercising the option for the second step of our strategic transaction with Alliance Boots, completing the transition of our pharmaceutical distribution to AmerisourceBergen and driving continued improvement in our daily living business that resulted in our largest year-over-year quarterly and fiscal-year sales increases in three years,”
He added:
“While continuing to work through pharmacy margin pressure, we were able to achieve improved top-line pharmacy growth as our retail pharmacy market share for the fiscal year increased 30 basis points to 19.0 percent. Finally, we maintained solid expense control in the fourth quarter and are moving forward with the implementation of our previously announced cost-reduction initiative to achieve $1 billion in savings by the end of fiscal 2017.”
