Walgreens Boots Alliance shares fell more than 5% on Wednesday after the drugstore chain missed earnings estimates amid unexpectedly low prescription volume.

For the first quarter, Walgreens’ net income fell 24.8% to $845 million, or 95 cents per share, as revenue rose 1.6% to $34.3 billion. On an adjusted basis, the company earned $1.37 per share.

Analysts had expected adjusted earnings of $1.41 per share on revenue of $34.6 billion.

CEO Stefano Pessina said Walgreens was “maintaining our outlook for the year despite a soft first quarter. We are confident our strategic plans are the right ones to drive long-term sustainable growth going forward.”

During the quarter, “we were very satisfied with the progress made in our Transformational Cost Management Program and with the strong cash flow we delivered,” he added.

But Walgreens shares dropped 5.7% o $55.92 in trading Wednesday — dealing another blow to a stock that wrapped up 2019 as the worst-performing in the Dow Jones Industrial Average.

“We anticipate that profitability and sales growth may be hard to come by for the foreseeable future,” Edward Jones analyst John Boylan wrote in a research note.

As CNBC reports, Walgreens has been under pressure as “more consumers shop online for drugstore staples such as shampoo and vitamins.” In addition, “Insurers are also squeezing pharmacies, paying them less to fill prescriptions.”

In the first quarter, Walgreens said, gross profit decreased 5.2% as pharmacy prescription growth in the U.S. was “insufficient to offset year-on-year reimbursement pressure.”

Global CFO James Kehoe said the cost-savings initiatives were “gaining momentum” and that the company has “a much higher level of confidence” that it can exceed the $1.8 billion target that was set in October.

“These savings will allow us to fund the investments needed to create new and innovative business models,” he told analysts in an earnings call.

For fiscal 2020, Walgreens reaffirmed its earlier forecast of roughly flat earnings compared with 2019, when it posted adjusted earnings of $5.99 per share. Analysts expect, on average, adjusted earnings of $5.93 per share.

Photo by: Joan Slaking/Education Images/Universal Images Group via Getty Images

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