Walgreens Boots Alliance on Thursday beat Wall Street’s fiscal fourth quarter earnings expectations as the company saw a surge in demand for Covid-19 vaccines amid growing demands from employers.
Shares rose more than 2% early Thursday in premarket trading.
The pharmacy chain delivered 13.5 million vaccines in a three-month period – nearly double the roughly 7 million it expected over a three-month period. He is poised for a new wave of vaccinations as people get boosted and young children are expected to be eligible for vaccinations soon.
“Credentials play a role,” CEO Rose Brewer told CNBC, Berthe Coombs. “There are many companies and organizations, cities and municipalities that are demanding, and I think it makes people say, ‘I need to go to work. So I need to get this vaccine. ” So it causes growth. And we see it in our stores. “
In addition, she said, people are worried about Covid infection, especially the delta variant.
Along with the rise in vaccinations, Walgreens said it saw sales growth thanks to home tests for Covid and a rebound in demand for over-the-counter cold, cough and flu medicines.
The company also said it had met its goal of cutting annual costs by $ 2 billion a year ahead of schedule.
Late Thursday morning, the pharmacy chain will host a Virtual Investor Day. Brewer, Walgreens’ new CEO, is expected to outline his strategy to renew the company’s brand and drive growth. He is also expected to share his forecast for the coming fiscal year.
Here’s what Walgreens reported, compared to what analysts expected in the fourth quarter ended Aug.31: according to Refinitiv:
- Earnings per share: $ 1.17 (adjusted) vs. $ 1.02 expected.
- Income: $ 34.26 billion vs. expected $ 33.30 billion
This quarter, net income rose to $ 627 million, or 72 cents a share. from $ 373 million, or 43 cents a share, a year earlier. Walgreens earned $ 358 million, or 41 cents a share, from continuing operations in the last quarter.
However, excluding items, the company earned $ 1.17 a share, which is more than the $ 1.02 expected by analysts surveyed by Refinitiv.
Sales rose to $ 34.26 billion. from $ 30.37 billion a year earlier, higher than analysts’ expected $ 33.30 billion.
Sales on the Internet and at Walgreens stores in the US, which have been open for at least a year, were up 8.1% year-over-year as consumers received Covid-19 vaccines and more prescriptions. Sales of health and wellness products jumped 14% year-over-year as consumers bought more home tests for Covid, vitamins and over-the-counter cough, cold and flu medicines.
Brewer said Covid vaccines have a “halo effect” when sold on store shelves. When people went to the pharmacy for a shot or waited 15 minutes after the shot, she said some were buying other items, from beauty products to allergy medication. She said Walgreens wants to increase the number of other types of vaccines she injects, for hepatitis B and others.
Its international segment, which includes the UK-based Boots chain, is recovering after the Covid-19 restrictions were lifted in July. Sales on the Internet and at Boots UK stores that have opened at least a year were up 11.4% in pharmacy services and 15% in retail over the year-ago quarter.
Traffic to Boots stores on main streets, such as those near offices and commuter hubs, is recovering, the company said, but still below pre-pandemic levels.
The pharmacy chain said it has administered more than 40 million Covid vaccines to date. Vaccinations peaked in the third quarter, when 17 million were given.
Walgreens Boots Alliance shares were up about 19% this year as of late Wednesday. The company has a market valuation of $ 40.88 billion. Shares at the close on Wednesday were down less than 1% to $ 47.26.