© Reuters. Individuals stroll by a Walgreens, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York Metropolis, U.S., November 26, 2021. REUTERS/Andrew Kelly
By Mrinalika Roy and Raghav Mahobe
(Reuters) – Walgreens Boots Alliance (NASDAQ:) Inc reported a better-than-expected quarterly revenue on Thursday, as larger UK retail gross sales helped greater than offset waning COVID vaccination demand.
Shares of Walgreens, one of many largest U.S. pharmacies, rose almost 3% amid larger market weak spot after the corporate additionally forecast a “better-than-feared” full-year revenue.
Analysts had raised considerations about Walgreens’ near-term efficiency and lowered their expectations, particularly after rival Ceremony Assist (NYSE:) reduce its full-year forecast final month and flagged considerations of sustained strain on shopper spending and provide chain challenges.
Regardless of inflationary challenges, Walgreens noticed an uptick in retail gross sales, helped by larger demand for well being and wellness in addition to magnificence merchandise.
“With inflation at four-decade highs, customers are expressing uncertainty in regards to the future and looking for worth. On the similar time, we all know that well being and wellness will at all times be a precedence and more and more so after COVID-19,” Chief Govt Officer Rosalind Brewer stated.
The corporate additionally benefited from its Walgreens Well being phase, which was launched final 12 months as a part of Walgreens’ efforts to diversify its enterprise. The unit introduced in gross sales of $622 million within the fourth quarter.
The corporate now expects full-year revenue within the vary of $4.45 to $4.65 per share, the highest finish of which got here above analysts’ expectations of $4.53.
J.P.Morgan analyst Lisa Gill stated the forecast “will alleviate some considerations as steerage was above the scary variety of beneath $4”.
Pharmacy gross sales, nevertheless, continued to be pressured within the quarter on account of waning COVID vaccination demand and decrease prescription volumes as staffing points impacted pharmacy hours.
The corporate stated it expects prescription volumes to get better subsequent 12 months however warned that “decrease COVID exercise would proceed to be a sizeable headwind.”
Walgreens estimates it’ll administer 16 million vaccinations subsequent 12 months, in comparison with 35 million this 12 months.
Excluding gadgets, the corporate earned $0.80 per share within the quarter, in contrast with Refinitiv IBES estimates of $0.77.
