Walgreens Boots Alliance The drug chain beat estimates for fiscal fourth-quarter sales on Thursday as it repositions itself as a healthcare-focused company.
The company said it expects full-year adjusted earnings per share of $4.45 to $4.65 in the upcoming fiscal year, in line with Wall Street expectations. However, Walgreens said its business growth would face a sharp contrast amid strong demand for Covid-19 vaccines and a strong dollar.
Shares were up about 4 percent in premarket trading.
In the year Here’s what the company reported for its fiscal fourth quarter ended Aug. 31, compared to analysts’ expectations. Based on Refinitiv data:
- Earnings per share: 80 cents, adjusted, from 77 cents expected
- Income: 32.45 billion dollars from 32.09 billion dollars expected
Sales were down from last year’s quarter. Including certain costs, Walgreens swung into bankruptcy within three months. The net loss was $415 million, or 48 cents a share, compared with net income of $627 million, or 72 cents a year earlier.
The company said the profit was driven by a non-cash charge from its Boots UK operation and long-term cost management programme. A year ago, Walgreens set a $3.3 billion savings goal by 2024.
Walgreens has invested heavily in transforming itself from a major drug store chain into a major health care company. VillageMD is opening hundreds of doctor’s offices. He invested $5.2 billion to own a primary care company. It recently announced plans to accelerate the acquisition of two other companies: CareCentrix, which coordinates home care and benefits, and Shields Health Solutions, a specialty pharmacy company.
Walgreens CEO Rose Brewer said in a news release that the upcoming fiscal year will be “a year in which we accelerate core growth and rapidly grow our U.S. healthcare business.”
At the end of the quarter, Walgreens had a total of 334 doctor’s offices with VillageMD. Village medical clinics are located near drug stores. It also has 70 stores with Health Corners, where a registered nurse or pharmacist can schedule a mammogram, screen a patient for blood pressure or diabetes, or assist with other health care needs.
The covid vaccines that boosted Walgreens’ sales and foot traffic have fallen sharply. In the fourth quarter, the pharmacy chain dispensed 2.9 million vaccines. This is down from 4.7 million vaccinations in the fiscal third quarter, and significantly down from 15.6 million vaccinations in the first quarter and 11.8 million vaccinations in the second quarter.
Sales at Walgreens’ U.S. retail and pharmacy division fell 7.2 percent to $26.7 billion in the fourth quarter. Comparable sales, however, rose 1.6 percent.
Its global business has benefited greatly from currency headwinds. Fourth quarter sales were $5.1 billion, a 6.6 percent decrease from last year. That includes a negative currency impact of 13.3%.
As customers return to the store, Walgreens said it is investing in its workforce to return to normal business hours. However, it continues to see some changes in market practices. U.S. digital sales growth rose 14 percent in the fourth quarter, up from 82 percent last year.
On Thursday, the company raised its outlook for the healthcare sector. He now says he expects sales of $12 billion by 2025 instead of $11 billion.
By Wednesday’s close, Walgreens shares were down nearly 39% so far this year. That trails behind the S&P 500, which is down about 25%. Walgreens shares closed Wednesday at $31.94, down 2 percent.
Read the company’s earnings release here.
This story is developing. Please check back for updates.