Walgreens had stronger-than-expected sales last quarter, with revenue up 6% year-over-year. But it still had a $3 billion loss because of a writedown related to a Chinese pharmaceutical chain and a home care provider, CareCitrix.
Walgreens’ shares rose nearly 4% in premarket trading, though the stock is still down almost 70% this year.
Drugstore chains like Walgreens, CVS, and Rite Aid are seeing profits from prescription sales drop because of lower reimbursement rates and competition from Amazon. CVS recently announced 2,900 job cuts as part of a $2 billion cost-saving plan.
Also, drugstores are losing out to rivals like Target and Dollar General, especially when it comes to selling snacks and household goods. In May, Walgreens cut prices on over 1,000 items to draw in budget-minded shoppers.