Walgreens income rises regardless of sharp decline in demand for Covid exams, vaccines

Walgreens income rises regardless of sharp decline in demand for Covid exams, vaccines

A person walks close to a Walgreens pharmacy on March 09, 2023 in New York Metropolis. 

Leonardo Munoz | Corbis Information | Getty Photos

Walgreens Boots Alliance on Tuesday mentioned its quarterly revenue declined greater than 20%, pushed by sharply decrease Covid vaccine volumes and check gross sales in comparison with final winter, when the Covid Omicron variant surge drove sturdy demand.

Income, nevertheless, got here in greater than Wall Avenue’s expectations, rising 3.3% yr over yr.

Listed below are Walgreens’ outcomes for the quarter ended Feb. 28, in comparison with estimates from analysts polled by Refinitiv:

  • Earnings per share: $1.16, adjusted, vs. $1.10 anticipated
  • Income: $34.86 billion, vs. $33.53 billion anticipated

The pharmacy chain and well being care firm reported a internet revenue of $703 million, or 81 cents a share, in comparison with $883 million, or $1.02 a share, in the identical quarter a yr in the past. Excluding sure gadgets, per-share earnings had been $1.16 for the interval.

Working revenue fell to just about $200 million from greater than $1.2 billion a yr earlier, reflecting a $306 million pre-tax cost for opioid litigation claims, greater investments in pharmacy wages and prices related to its $3.5 billion funding within the acquisition of Summit Well being.

Beneath CEO Rosalind Brewer, now in her second yr, Walgreens has centered on rising the corporate’s well being unit major care and in-home companies.  Throughout the quarter, Walgreens invested $3.5 billion towards VillageMD’s acquisition of major care supplier Summit Well being.

Well being care unit revenues topped $1.6 billion within the quarter, with major care companies rising 30% at VilliageMD, together with Summit Well being, whereas residence care at CareCentrix was up 25%.

“With the closing of VillageMD’s acquisition of Summit Well being, WBA is now one of many largest gamers in major care,” Brewer mentioned within the firm’s earnings launch. “WBA exited a stable second quarter with Acceleration in February, including to confidence in driving sturdy progress within the second half of the yr.”

Walgreens reaffirmed its full yr earnings steering of $4.45 to $4.65 per share, projecting adjusted earnings progress of mid-20% over the subsequent two quarters.

Extra U.S. shops increase hours

Walgreens’ U.S. retail pharmacy section had revenues of $27.6 billion within the quarter, down 0.3% from a yr in the past.  Nonetheless, comparable pharmacy prescription gross sales had been up 4.9%, pushed by greater costs on model title medication.

Pharmacy prescription quantity was 3.5%, excluding vaccines. Walgreens mentioned it made progress on easing pharmacy employees shortages, serving to the corporate return 500 shops to regular pharmacy working hours, roughly 1900 shops stay beneath shorter hours of operation.

Comparable gross sales within the entrance of retailer had been down 1% from a yr in the past, pushed by a lot decrease gross sales of over-the-counter Covid exams.

The worldwide section’s gross sales rose extra 1.5% yr over yr to $5.7 billion, regardless of forex headwinds. Boots UK comparable retail gross sales rose 16% from a yr in the past, marking the eighth consecutive quarter of market share beneficial properties.

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