Walgreens Boots Alliance beat earnings forecasts for its final quarter of fiscal 2022, and the drugstore chain’s initial outlook for 2023 was also mostly above expectations.
A drop in COVID-19 vaccines and a large charge linked to the company’s UK stores weighed on results, but shares rose earlier Thursday after Walgreens detailed its performance.
Overall, the company posted a loss of $415 million in the quarter ended August 31, as sales fell 5% to $32.45 billion. Adjusted earnings for unique items amounted to 80 cents per share.
Analysts, on average, expect earnings of 77 cents a share on $32.1 billion in revenue in Walgreens’ fiscal fourth quarter, according to FactSet.
Walgreens Boots Alliance Inc. operates a network of about 13,000 pharmacies worldwide, with the majority of its locations in the United States. But it has also drawn more attention as it competes with rivals to come up with ways to keep customers healthy, on prescriptions and out of expensive hospitals.
That’s a growing point of emphasis with bill payers like insurers and employers.
The company is opening primary care offices next to some of its stores with the idea of pharmacies and doctors’ offices working together to help keep patients healthy.
Walgreens is also developing centers in the United States that use automated technology to fill prescriptions and deliver them to pharmacies. That will give pharmacists more time to work with customers.
Chief Executive Officer Rosalind Brewer said in a statement Thursday announcing quarterly results that 2022 was the first year of Walgreens’ “transformation into a consumer-focused health care company.”
In the last quarter of the year, Walgreens booked a $783 million non-cash impairment charge from its Boots UK business, which it tried to sell earlier this year. The company also saw the number of COVID-19 vaccines administered at company stores drop to 2.9 million from 13.5 million in the year-ago quarter.
Sales also fell in the quarter due to the decline in its AllianceRx Walgreens business, which is a home delivery and specialty pharmacy for patients with rare, chronic and complex conditions.
For fiscal 2023, Walgreens said Thursday that it expects adjusted earnings per share to be between $4.45 and $4.65.
Analysts are forecasting, on average, earnings of $4.51 per share.
Shares of Deerfield, Illinois-based Walgreens rose 1% to $32.27 in premarket trading on Thursday.
The stock had fallen nearly 40% year-to-date as of Wednesday’s close. That’s about twice the drop in the Dow Jones Industrial Average, of which Walgreens is a component.
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Follow Tom Murphy on Twitter: @thpmurphy
