Deerfield Beach, Fla. -- Walgreens’ fiscal fourth quarter net income fell 55% compared with a year ago when the drugstore operator recorded a big business sale gain. However, its adjusted earnings still beat analysts’ expectations.
Walgreen earned $353 million for the quarter ended Aug. 31, compared with $792 million a year ago. On an adjusted basis, Walgreen earned $553 million versus $599 million a year earlier. Adjusted earnings excluded acquisition-related costs and costs related to inventory.
Revenue fell 5% to $17.1 billion, from $18 billion a year ago. The chain was impacted by a split with pharmacy benefits manager Express Scripts Holding Co. that shifted customers away from its stores. The companies have since agreed to a new contract, but it didn't start until Sept. 15.
“This was a challenging, but very important year for Walgreens, and we finished with a tough quarter. While we controlled costs and generated strong cash flow in the fourth quarter, our performance also reflected a strategic shift in promotional spending, a continued economically challenged consumer, and the impact from Express Scripts,” said Walgreens president and CEO Greg Wasson. “Entering the new fiscal year, we believe we are positioned for growth as we benefit from the launch of our Balance Rewards loyalty program, our reentry into the Express Scripts pharmacy provider network and our execution of the Alliance Boots strategic partnership.”
For the full fiscal year, Walgreen earned $2.13 billion, or $2.42 per share, on $71.63 billion in revenue.