(Bloomberg) — Walgreens Boots Alliance Inc.’s cost-cutting measures helped the drugstore chain beat analysts’ earnings estimates for the fiscal second quarter, as U.S. same-store retail sales dropped again after a mild flu season and pharmacy revenue growth weakened.
Recent efforts to renovate stores and add higher quality items to bring in shoppers have yet to pay off. In the United States, where Walgreens (NYSE:WBA) makes almost 80 percent of annual revenue, same-store retail sales fell 0.3 percent in the quarter ended in February, according to a statement Tuesday. It’s the second quarterly decline in a row for that measure of sales, which excludes the newest stores.
The shares dropped 3.4 percent to $83.41 at 10:27 a.m. in New York.
Earnings, excluding one-time items, were $1.31 a share, compared with the $1.28 average of analysts’ estimates compiled by Bloomberg. The company also raised the lower-end of its 2016 earnings forecast.
The company “continued to navigate through a challenging environment,” with cost savings and strong international profits helping make up for weak prescription numbers at U.S. drugstores, Ross Muken, an analyst for Evercore ISI who recommends buying the shares, said in a note to clients.