Walgreens Q1 profit tops as it moves toward closing Rite Aid deal

Walgreens Boots Alliance on Thursday reported a better-than-expected profit for its first quarter and also said an announcement that it has closed the deal on its proposed acquisition of Rite Aid would come soon.



Walgreens confirmed it is actively engaged in discussions with the Federal Trade Commission regarding its pending Rite Aid acquisition, which was announced more than 14 months ago. Also subject to FTC approval is the sale of 865 Rite Aid locations to Fred's for almost $1 billion.



"The company is working toward a close of the acquisition in the early part of this calendar year," Walgreens stated.



Walgreens net income fell to $1.1 billion, or 97 cents per share, in the first quarter ended Nov. 30, from $1.11 billion, or $1.01 per share, in the year ago period.



Walgreens’ Retail Pharmacy USA division posted first quarter sales of $20.7 billion, up 1.4%. Same-store sales 1.1%. Pharmacy sales, which accounted for 69.1% of the division’s sales in the quarter, increased 2.5% compared with the year-ago quarter. Comparable pharmacy sales increased 2%.



“Overall we are pleased with the progress this quarter, with results in line with our expectations," announced Stefano Pessina, Walgreens Boots Alliance executive vice chairman and CEO. "We continue to anticipate that growth in the second half of fiscal 2017 will reflect the new strategic pharmacy partnerships we announced last year. As a result, we have raised the lower end of our fiscal year guidance by 5 cents per share.”



Since the end of the first quarter, the company has completed the first phase of the rollout of its new, differentiated beauty offering in more than 1,800 stores.



Walgreens Boots Alliance's international division had first quarter sales of $3 billion, a decrease of 14.4% from the year-ago quarter due to the negative impact of currency translation. Sales increased 0.5% on a constant currency basis.