Walgreens Q3 Earnings Preview: Cost Reductions And Acquisition Synergies Likely Boosted Margins

Post the Alliance Boots acquisition, the pharmacy giant has shifted gears from an M&A driven expansion mode to an optimization mode, where the focus is on increasing operating efficiencies and cost-cutting. The company is looking to generate cost savings in multiple ways including better inventory management, store closures and IT optimization. While some margin improvement was already seen in the previous quarter (ending May), we believe the savings generated during the August-ending quarter were much larger. This likely resulted in an expansion in the company’s EBITDA margins and hence a higher earnings per share in Q3.

from Forbes Real Time http://onforb.es/1ilHcYW