Publix Posts $1.7 Billion Q2 Profit as Medicare Drug Pricing Caps 1% Sales Growth
Updated
Updated · Supermarket News · Aug 4
Publix Posts $1.7 Billion Q2 Profit as Medicare Drug Pricing Caps 1% Sales Growth
3 articles · Updated · Supermarket News · Aug 4
Summary
$15.7 billion in second-quarter sales rose just 1% at Publix, while comparable-store sales slipped 0.5% in the 13 weeks ended June 27.
The grocer said Medicare's maximum fair price program on 10 drugs cut pharmacy revenue after taking effect Jan. 1, and softer consumer spending further weighed on sales.
$1.7 billion in net earnings increased 20.5%, but adjusted net earnings excluding unrealized equity gains rose only 1.7% to $1.1 billion, showing the profit boost was largely investment-related.
For the first six months, sales increased 1.5% to $31.9 billion while adjusted net earnings held flat at $2.2 billion, extending pressure seen after Publix's rare first-quarter earnings decline.
Publix also lowered its privately held share price to $19.60 from $20.45 effective Aug. 1, underscoring a difficult economic backdrop cited by CEO Kevin Murphy.