Amazon entry into pharmacy spooks the investors
Walgreen’s Boots Alliance Inc is very hopeful and strong in its presence in the healthcare sector amidst all the talks regarding Amazon entry into the sector. Though, its shares fell more than 11%, the company’s chief does not feel worried about the confusing talks going among the investors. Wallgreen posted better than expected quarterly result and confirmed the news of $10 billion buybacks, still, the investors seemed unconfident leading to the fall in the share price.
Drug retailers and wholesalers were found in a sell-off mood after the news from Amazon that it would buy online pharmacy PillPack. Last year, Wallgreen also bought some Rite Aid Corp’s US stores after scrapping its decision to invest and buy the small rivals existing in the industry.
According to the CEO, “you see, the pharmacy world is much more complex than just delivering certain pills or certain packages. We are not particularly worried.” He further insisted that the company is also not complacent and working to move ahead for expansion and growth.
In its first earnings report, the company had posted a 19.3% rise in its US pharmacy sales due to higher demand for prescription medicines at Rite Aid stores. However, the retail segment continued to lag behind with its sales falling 3.8%.
The company’s total share rose 14% and its quarterly dividend also rose 10% to 44centes per share.
With all the positive performances, the effect of Amazon entry needs to be watched for. However, the rivals are also ready with their winning strategies and combat the competition.