After trading as low as $11.71 on Thursday, Walgreens Boots Alliance (WBA) ended the day at $12.19, down by 22.16%. The drugstore warned that sales growth weakened in the third quarter. The aggressive store closure indicates severe customer sales pressures.
On the conference call, Walgreens said that it relied on price and promotion investments, hurting gross margin. Additionally, higher levels of shrinkage (theft) hurt its performance. To fix the business, the firm announced major store closures of up to 25%, or 8,600 stores. Executives did not mention a dividend cut.
Pet food supplier Chewy (CHWY) surged above $36, an irrational rally. Meme trader Roaring Kitty posted a picture of a dog, sending CHWY and Petco Health (WOOF) higher intraday. CHWY stock ended the day at $29.05. Be wary of investing in Chewy, since valuations are highly unattractive at a P/E of 37 times, 158.5% higher than the sector median.
In the AI chip sector, Micron Technology (MU) lost 7.12%. The quarterly results and outlook ahead are some of the reasons for the decline. Investors took profits after shares gained ~ 55% YTD.
In the retail sector, Nike (NKE) will open down by around 12% this morning. The CFO hinted a guidance cut would follow. CFO Matthew Friend said that the firm is taking actions to reposition Nike to be more competitive. Nike does not have sustainable, long-term profitable growth prospects. Addidas and On Holdings (ONON) are more attractive holdings.
