Walgreens Boots Alliance bounced back on Thursay shares, following a drop after its sales failed to meet Wall Street's expectations during the company's fiscal fourth quarter.
Walgreens sales rose nearly 11% to $33.4bn in the quarter ended 30 August, falling short of the $33.8bn target suggested for the period by Bloomberg analysts, as Walgreens' US retail pharmacy revenues increased by 14.4% to $25.5bn.
The New York-listed company's net income for the period nearly doubled to $1.5bn, or $1.55 per share in the quarter compared to $802m, or $1.55 per share, in the same period last year.
However, comparable sales in the fourth quarter fell by 1.9% as demand dropped for the general merchandise and personal care product categories.
Stefano Pessina, Walgreens' executive vice chairman and chief executive, said: “The integration of the acquired Rite Aid stores is on track, and our pharmacy market share in the US increased year-over-year on an annual basis.”
Of the 1,932 Rite Aid stores and three distribution centres, which Walgreens purchased for $4.4bn last year, the company closed 458 locations as part of an optimization plan that will be continued into next year and the remaining stores are integrated and brought under the Walgreens brand.
Pessina added on Twitter that future mergers and acquisitions have not been ruled out as they bring the company scale “beyond anything we could do for ourselves”.
Earlier this year, the company entered into partnerships with Kroger, which will allow customers to order online before picking up groceries instore, Alibaba, in an agreement that will allow for the sale of Walgreens products in China, and laboratory testing outfit LabCorp.
Pharmacies are under pressure to transform their businesses as online businesses eat into their market share, with Amazon having recently acquired online pharmacy PillPack.
Alex Gourlay, co-chief operating officer, told analysts: “We think we've done a good job on the front end in terms of shifting the emphasis to become more of a health, beauty, wellness expert, and there's a lot more to go. And it's maybe taking us longer than we had first anticipated, but the signs are very clear where we're heading to and the transition is well under way.”
Walgreens' shares were up 0.80% at $72.89 at 1629 BST.