The improved market condition has facilitated Walgreens Boots Alliance Inc (NASDAQ:WBA) with higher than expected profit for the recent quarter. As per the reports, it reported financial results on Thursday. Along with financials, the company also announced that it would continue the cost-cutting program in the future as well. Walgreens Boots’ share surged towards the end of the day after this announcement.
Insights on The Matter:
Walgreens is one of the well-known drugstore operators in the country. The company is on a lookout of expansion. According to reports, it has announced to revamp the field operations, as well as corporate operations across the nation. In order to cut down its costs, the company has announced that it would close down 200 stores in the near future.
While talking to shareholders and reporters on a conference call, Executive Vice President of Walgreens Alex Gourlay stated that the company had to shut down its stores in order to put the right store at the right place. The procedure is quite hectic and would take some time before it could relocate 200 of its stores in the country.
Walgreens Boots Alliance Inc (NASDAQ:WBA) announced a cost-cutting program worth $1 billion in August 2014. As per the reports, the program was supposed to carry out for the next three years. During the recent conference call, Gourlay stated that Walgreens had figured out a way to expand this program to $1.5 billion limit by August 2017. The pretax restructuring charges are expected to revolve around $1.6 billion to $1.8 billion during this time.
As soon as the announcement came out, the shares of Walgreens surged by 2.8% and touched a magical figure of $90.17. Experts claim that the share prices of the company could rise in the near future. The cost cutting program of the company makes sense and can start a game-changing move among the corporate houses.