Business

Walgreens (WBA) Q3 earnings 2022

Walgreens store on State Street and Randolph Street in Chicago.

Nancy Stone | Chicago Tribune | Tribune News Service via Getty Images

The Walgreens Boots Alliance on Thursday reported better-than-expected quarterly sales and earnings as retail sales rebounded and online shopping surged.

But shares fell about 2% in premarket trading as demand for Covid-19 vaccines eased and the company reiterated rather than raised its full-year guidance. The company said it expects adjusted earnings per share to rise in low single digits.

Here’s what the company said compared to what analysts expected for the three-month period ending May 31: according to Refinitiv:

  • Earnings per share: 96 cents adjusted vs. expected 92 cents.
  • Income: $32.6 billion vs. expected $32.06 billion

Net income for the quarter fell to $289 million, or 33 cents a share. from $1.2 billion, or $1.38 per share, a year earlier. The sharp decline reflected $683 million in spending related to opioid settlements with the state of Florida, declining sales at U.S. pharmacies as they blocked a large supply of Covid-19 vaccines a year ago, and investment in an expanding health care business.

Excluding items, the company earned 96 cents per share, beating the 92 cents expected by analysts polled by Refinitiv.

Sales fell to $32.6 billion. from $34.03 billion a year earlier. Analysts had expected $32.06 billion.

Walgreens boosted sales during the pandemic as shoppers turned to its stores for Covid-19 vaccines and tests. This demand is fading away, pushing the company to stimulate growth in other ways.

The company introduced 4.7 million vaccines in the third quarter, down sharply from 15.6 million vaccines in the first quarter and 11.8 million in the second quarter.

Healthcare was a major push, with Walgreens making a deal with VillageMD to open hundreds of doctor’s offices in its stores.

Walgreens has also expanded online options like pickup and delivery to try to stop customers from buying toothpaste, soap and other items from online players like Amazon. The company said its digital options gained popularity this quarter, up 25% year-over-year, on top of a 95% year-over-year gain. The growth was driven by 2.8 million same-day pickup orders, the company said.

In the US and UK, retail sales rose as consumers moved out of the house again. Same-store sales in the US rose 2.4% excluding tobacco products and 24% in Boots UK retail.

Earlier this week, Walgreens said that will stop plans to sell its Boots business in the United Kingdom, citing instability in the markets. In January, the company said it was exploring strategic options for the division, including a possible sale.

As of the end of Wednesday, Walgreens shares are down about 22% this year. On Wednesday, the stock closed at $40.87, bringing the company’s market value to $35.30 billion.

Read the company’s earnings report here.

This story is evolving. Please stay tuned for updates.


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