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Walgreens misses profit estimates on pharmacy weakness, shares fall 7%

January 08, 2020 / Manas Mishra, Trisha Roy

Walgreens Boots Alliance Inc’s (WBA.O) quarterly profit missed Wall Street estimates on Wednesday, hit by lower payments from insurers on drugs sold at its U.S. pharmacies, knocking back its shares and those of rival CVS Health Corp (CVS.N). The company sought to reassure investors, saying it would meet its adjusted full-year profit forecast of roughly flat growth, betting on cost cuts and a harsh flu season. But shares fell nearly 7% to $55, dragging down those of CVS 2%, as investors worried that the pressure on reimbursement rates from insurers was likely to hurt profits further. Walgreens has also been struggling with disappointing performance in its Boots UK unit and intense competition from the arrival of Amazon.com Inc (AMZN.O) in the pharmacy market in the past year. To cushion the impact, Walgreens has closed stores and launched cross-selling partnerships with companies including grocer Kroger Co (KR.N) and weight-loss clinic operator Jenny Craig.