Up until now vendors of “essential” products such as grocery stores and pharmacies were seen as the sole silver lining in a decimated retail sector, where businesses from restaurants, to lodging, to bars, to cinemas had all effectively shut down is part of the ongoing coronavirus lockdown.

However, that changed this morning when Walgreen reported earnings in which it warned that “strong” sales are slowing and foot traffic is staring to decline, suggesting that the coronavirus buying exhaustion is starting to spread even to formerly impregnable outlets.

While Walgreens reported earnings that beat Q2 expectations, this is what the company said about its outlook, which not surprisingly was focused entirely on covid:

Prior to the COVID-19 pandemic, the company was on track to maintain its guidance for full-year fiscal 2020, of roughly flat growth in adjusted EPS, at constant currency rates, with a range of plus or minus 3 percent. Second quarter financial performance exceeded the company’s expectations. Although the COVID-19 situation is ultimately temporary, given the many rapidly changing variables related to the pandemic, at this time WBA is not in a position to accurately forecast the future impacts. The company will continue to closely assess and manage this situation, and will provide further updates in the next earnings report when both the potential positive and negative effects of the pandemic will be known in more detail.

But it is what the CFO said in the call that spooked markets:

*WALGREENS CFO: NOT ABLE TO ACCURATELY FORECAST COVID-19 IMPACTS

*WALGREENS DEFERRING SOME INVESTMENTS: CFO

*WALGREENS SEES LESS DISCRETIONARY SPENDING: CO-COO

*WALGREENS SAYS FOOT TRAFFIC STARTING TO DECLINE

*WALGREENS ‘STRONG’ SALES HAVE SLOWED, NOW DECLINING: CFO

*WALGREENS: FULL IMPACT OF COVID-19 WON’T BE KNOWN FOR MONTHS

And with traders now forced to reprice their assumptions about the formerly “safe” pharmacy space, Walgreens Boot stock tumbled over 6% in a preview of what awaits most other companies as they unveil how the new corona reality affects their top and bottom lines.

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