- Walgreens’ quarterly results beat Wall Street’s expectations, even as earnings fell.
- Hundreds of stores returned to regular pharmacy hours during the quarter, helping to increase prescription volume
- Walgreens’ growing health care division saw sales jump.
A man walks near a Walgreens pharmacy on March 9, 2023 in New York City.
Leonardo Munoz | Corbis News | Getty Images
Walgreens Boots Alliance said Tuesday its quarterly profit fell more than 20%, driven by significantly lower Covid vaccine volumes and test sales compared to last winter, when the surge in the Covid Omicron variant fueled strong demand .
However, revenue beat Wall Street expectations, rising 3.3% year over year.
Here are Walgreens’ results for the quarter ended February 28, compared to estimates by analysts polled by Refinitiv:
- Earnings per share: $1.16 adjusted versus $1.10 expected
- Revenue: $34.86 billion versus $33.53 billion expected
The drugstore chain and healthcare company reported net income of $703 million, or 81 cents a share, compared with $883 million, or $1.02 a share, in the same quarter last year. Excluding certain items, earnings per share for the period were $1.16.
Operating income fell to nearly $200 million from more than $1.2 billion in the prior year, reflecting a $306 million pre-tax charge for opioid litigation, higher investments in pharmacy wages and costs related to the investment of 3 $.5 billion reflected in the acquisition of Summit Health.
Under CEO Rosalind Brewer, now in her second year, Walgreens has focused on expanding the company’s primary care and home health services. During the quarter, Walgreens invested $3.5 billion in VillageMD’s acquisition of primary care provider Summit Health.
Healthcare division revenue exceeded $1.6 billion for the quarter, with primary care services at VilliageMD, including Summit Health, growing 30%, while home care at CareCentrix grew 25%.
“With the completion of VillageMD’s acquisition of Summit Health, WBA is now one of the largest players in primary care,” Brewer said in the company’s release. “The WBA ended a solid second quarter in February with Acceleration, boosting confidence in driving strong growth in the second half of the year.”
Walgreens reiterated its full-year earnings guidance of $4.45 to $4.65 per share and forecast adjusted earnings growth of the mid-20% over the next two quarters.
Walgreens’ U.S. retail pharmacy segment had revenue of $27.6 billion for the quarter, down 0.3% year over year. However, comparable pharmacy prescription sales rose 4.9%, driven by higher prices for branded drugs.
Pharmacy prescription volume was 3.5% excluding vaccines. Walgreens said it has made strides to alleviate staffing shortages at pharmacies, helping the company bring 500 stores back to normal pharmacy hours, and about 1,900 stores have even shorter hours.
Pre-store comparable sales were down 1% year-on-year due to much lower sales of over-the-counter Covid tests.
International segment revenue grew another 1.5% year over year to $5.7 billion, despite negative currency effects. Boots UK’s comparable retail sales rose 16% year-on-year, marking its eighth consecutive quarter of market share gains.