Credit Suisse projects strong Q2 for WAG
NEW YORK — Following the recent sale of Walgreens’ pharmacy benefit management business, Credit Suisse analysts said they are interested in the executive team’s updated thinking on their healthcare strategy and plans for the $550 million in proceeds.
In a pre-results note issued Monday, Credit Suisse analysts said they projected second-quarter earnings per share for Walgreens to be at least 82 cents, 2 cents above consensus, as well as overall strong sales. Additionally, they noted that continued gross margin expansion will help the drug store chain beat Wall Street estimates.
"We expect its recent earnings momentum to continue. … We project a 40 bps improvement in the FIFO GM (versus +81 bps increase reported in the first quarter), with the deceleration attributed to more difficult [year-over-year] comparisons," wrote Credit Suisse research analyst Edward Kelly. "Management’s tone on the front-end margin has been positive, reflecting strong holiday sell-through and the continued emphasis on smarter promotions/more profitable sales growth. Pharmacy margins have less potential for upside in our view given the current lull in the generic cycle."
What’s more, the analysts referred to Walgreens’ selling, general and administrative expenses as a "key unknown" in the second quarter, stating that they assumed "stable two-year stacked growth but recognize that a continuation of last quarter’s momentum would provide upside to [our] estimate. We continue to believe full year [selling, general and administrative expense] will come in at the low end of the company’s 6.5% to 7.5% guidance."
Walgreens will report its second-quarter results on March 22.
Walmart lends hand to Dress for Success
NEW YORK — Walmart announced that it has donated $2 million to Dress for Success, a nonprofit that helps females get back into the work force by providing clothes, interview preparation and other tools needed to land a job. The announcement was made at the third annual Dress for Success day of service in New York.
"Dress for Success is helping women get the skills they need to get back into the work force, and those services are desperately needed right now," said Mary Fox, Walmart’s SVP global apparel sourcing. "Three years ago, our New York office began building a relationship with Dress for Success by lending our time and skills because we believed in what the organization does to help women. We’re proud that our office’s community service efforts at the local level have grown to a national partnership between Walmart and Dress for Success."
Dress for Success reported an increase in female jobseekers that have been out of work for several weeks. The most recent employment report from the Bureau of Labor mirrored the sentiment, reporting that nearly 44% of the jobless have been unemployed for 27 weeks or more.
Today, 300 of Walmart’s New York-based associates will review resumes, provide career advice and conduct mock interviews at Dress for Success branches across New York City.
"Dress for Success is already a leader in employment retention for disadvantaged women, but with this generous grant from Walmart, we will significantly expand our work in job preparation and career advancement," said Joi Gordon, CEO of Dress for Success Worldwide. "The women we serve across the country will now have access to support and services for every phase of their professional lives, starting with the job search and leading to sustained employment and self sufficiency."
Dress for Success has more than 110 job-training offices globally and served an estimated 48,000 women last year through its nationwide efforts. The Going Places Network by Walmart helps women gain professional skills, accelerate their job search and build confidence.
Stater Bros. acquires two Albertsons stores
SAN BERNARDINO, Calif. — Stater Bros. has entered an agreement to purchase two stores from Albertsons in Lake Elsinore and Hesperia, Calif.
Stater Bros. said it expects to take possession of the locations from Albertsons, a Supervalu subsidiary, in mid-May. The California-based supermarket chain also said that the stores would receive several upgrades, including wider aisles; expanded and new full-service departments; and energy-efficient refrigeration, skylights and recycling centers.
"The Stater Bros. supermarket family is very proud to provide this greatly enhanced and larger Stater Bros. supermarket to better serve our long-time and ‘valued’ [Lake Elsinore and Hesperia] customers," said Jack Brown, Stater Bros. chairman and CEO.