Walgreens (WBA) Expands Partnership With Retail Giant Kroger

Walgreens Boots Alliance (NASDAQ:WBA) recently announced the expansion of its partnership with Kroger (NYSE:KR) . Per the terms of the expanded collaboration, Walgreens-owned brand health and beauty products will be offered at 17 Kroger stores in Knoxville, TN, from the fall of 2019.

This tie-up extension is aimed at strengthening Walgreens’ market presence.

Rationale Behind Partnership Extension

In 2018, the companies had announced a partnership deal to sell brands owned by Kroger at a new store format (now called Kroger Express) across 13 Walgreens stores in Northern Kentucky. The selected Walgreens locations also offered Kroger Pickup facilities for online orders.

With the partnership extension, Kroger Express stores, known for their extensive variety (average 2,300 products and up to 2,700 products), will help Walgreens generate higher customer turn-out. Walgreens’ products that will be sold in select Kroger stores comprise mostly of beauty and personal care products, over-the-counter medications, and wellness products. Sales of Walgreens-owned brand products are likely to rise once the deal comes to fruition.

Recent Developments

Lately, Walgreens has been focusing on forging partnerships with leading companies in order to solidify its market position. For instance, in January 2019, Walgreens and Microsoft (NASDAQ:MSFT) announced a strategic partnership to establish health care delivery models as well as technology and retail innovation to advance and enhance the quality of healthcare.

Price Performance

The stock has declined 27.1% against the industry’s fall of 23% in a year’s time.

Zacks Rank and Key Picks

Walgreens currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space are Medtronic (NYSE:MDT) and Baxter (NYSE:BAX) . Each of these companies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s long-term earnings growth rate is expected at 7.13%.

Baxter’s long-term earnings growth rate is projected at 12.8%.

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