Walgreens Boots Alliance on Thursday announced fiscal second-quarter earnings that topped analysts’ expectations, after the omicron variant of Covid-19 intensified demand for booster shots and tests and drove foot traffic during the winter months.
The drugstore chain reiterated its outlook for the year. It has said that adjusted earnings per share will grow in the low single digits.
Shares fell about 4% in premarket trading, as investors raised concerns that the drugstore chain could lose momentum as pandemic-related demand fades.
Here’s what Walgreens reported compared with what analysts were expecting for the second quarter ended Feb. 28, based on Refinitiv data:
- Earnings per share: $1.59 adjusted vs. $1.40 expected
- Revenue: $33.76 billion vs. $33.4 billion expected
In the quarter, net income fell to $883 million, or $1.02 per share, from $1.03 billion, or $1.19 per share, in the year-ago period.
Excluding items, the company earned $1.59 per share, exceedingthe $1.40 expected by analysts surveyed by Refinitiv.
Sales rose to $33.76 billion from $32.78 billion a year earlier, and surpassed the $33.4 billion that analysts expected.
Walgreens said same-store sales for retail in the U.S. jumped 14.7% in the three-month period compared with the year-ago period, the largest gain in over 20 years. The company said it saw growth in all categories — especially with health and wellness items, including at-home Covid tests, over-the-counter medications for cough, cold and flu and beauty.
At its U.K.-based Boots chain, retail same-store sales surged 22% year over year, with share gains across all major categories.
Walgreens’ e-commerce sales in the U.S. increased 38% in the second quarter, on top of 78% growth in the year-ago period. A lot of the growth in the more recent quarter came from 3.9 million same-day pickup orders, the company said.
Walgreens is taking steps to become a more health-care oriented company. Led by CEO Roz Brewer, the former operating chief of Starbucks, the retailer acquired the majority stake of VillageMD, a primary care company that plans to open hundreds of doctor offices inside of Walgreens stores. Walgreens is turning parts of some stores into a Health Corner, where customers can go for a medical consultation with a pharmacist or nurse. The company is opening automated facilities where robots fill prescriptions, freeing up pharmacists’ time to provide more medical care.
The drugstore chain said it administered 11.8 million Covid vaccines in the second quarter, bringing its total to over 62.8 million vaccines to date.
Walgreens also stands to benefit from the Food and Drug Administration’s authorization this week of a fourth Covid shot for people who are age 50 and older or immunocompromised.
Walgreens said it is still considering the future of its U.K.-based Boots drugstore chain. Earlier this year, Brewer confirmed Walgreens is exploring strategic optionsfor Boots, including a potential sale, as the company focuses on its U.S. health-care business.
As of Wednesday’s close, Walgreens shares are down 9% so far this year. Shares closed Wednesday at $47.46, bringing the company’s market value to $40.97 billion.
Read the company’s press release here.
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