(Bloomberg) — Walgreens Boots Alliance Inc. plans to cut about 4,000 jobs in the U.K. following a sharp drop in its business there and suspend stock buybacks, as the coronavirus pandemic jolts its business around the world.On Thursday, Deerfield, Illinois-based Walgreens said it anticipates full-year adjusted earnings between $4.65 to $4.75 a share, including $1.03 to $1.14 a share of costs related to Covid-19. Analysts surveyed by Bloomberg were expecting $5.43 a share. Walgreens had previously withdrawn its financial forecasts, citing the turmoil caused by the coronavirus.Drugstores are grappling with both short-term disruptions and potential longer-term changes in consumer behavior driven by Covid-19. Before the pandemic set in, Walgreens was already facing questions about how it planned to compete with rivals focusing on health care and internet giants sizing up the pharmacy business.Now, the playing field has changed once again, as the global spread of Covid-19 continues to alter both the health care and retail industries in unpredictable ways.Shares of Walgreens, which had dropped 28% so far this year through Wednesday, declined as much as 4.9% in premarket trading in New York.Foot traffic plummeted 85% in April at the company’s Boots stores in the U.K. amid strict lockdown orders, resulting in a $700 to $750 million hit to total sales that forced Walgreens to record a $2 billion impairment charge. Overall, sales in the quarter, which ended May 31, were essentially flat compared with the same quarter a year earlier, at $34.6 billion. In the U.S., people rushed to stock up on prescriptions and toilet paper in the early days of the pandemic. Comparable sales at U.S. drugstores rose 3%.Soaring CostsWalgreens said that a broad decline in visits to doctors’ offices and hospitals weighed on prescription volumes. Prescriptions filled at its U.S. drugstores fell 1.3% compared with the year-ago quarter, though volumes have shown “steady improvement” since the end of May.Costs associated with cleaning stores and boosting employee pay sent selling, general and administrative expenses soaring to $8.3 billion in the quarter from $6.2 billion in the year-ago quarter.To help expand its health-care offerings, Walgreens said Wednesday it plans to open as many as 700 doctors’ offices in its drugstores over the next five years. Rival CVS Health Corp. has already made big steps in that direction by buying insurer Aetna and making over stores to focus on patient care.Walgreens posted a loss of $1.71 billion, or $1.95 a share, in the fiscal third quarter. On an adjusted basis, earnings per share came to 83 cents. Analysts surveyed by Bloomberg expected adjusted earnings of $1.19 a share.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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