Walgreens Boots Alliance, a leading retail pharmacy chain, has lowered its full-year earnings guidance for the fiscal third quarter due to decreased consumer spending and a decline in demand for Covid vaccines and testing. As a result, the company’s earnings per share have been adjusted to a range of $4.00 to $4.05, down from the previous forecast of $4.45 to $4.65. In response, CEO Rosalind Brewer has implemented a cost-cutting initiative of $4.1 billion and is taking immediate action to improve profitability in the U.S. health-care segment. Despite these efforts, Walgreens’ stock has fallen approximately 7% in premarket trading.
Notably, Walgreens’ fiscal third quarter performance did not meet Wall Street’s expectations. The company reported adjusted earnings of $1.00 per share, falling short of the projected $1.07. However, revenue exceeded expectations, reaching $35.42 billion compared to the anticipated $34.24 billion. This is the first time since July 2020 that Walgreens has failed to meet analyst forecasts.
Although the earnings miss is disappointing, Walgreens did experience growth in its retail pharmacy and health-care segments, resulting in a 8.6% increase in sales compared to the same period last year. The company achieved sales of $35.4 billion, surpassing the $32.6 billion recorded in the previous year. Notably, Walgreens’ net profit for the quarter experienced a significant decline of 59%, primarily due to lower operating income.
In terms of specific sales figures, Walgreens’ U.S. retail pharmacy segment generated approximately $28 billion in sales, indicating a 4.4% increase from the same period last year. Additionally, pharmacy sales increased by 6.3% with comparable sales up nearly 10%, attributed to price inflation in brand medications. The company filled a total of 305 million prescriptions in the quarter, a slight increase of 0.1%. However, the administration of Covid vaccines dropped by 83% to 800,000, a significant decrease from 4.7 million in the previous year.
Sales in Walgreens’ U.S. health-care segment reached $2 billion, reflecting a notable $1.4 billion increase from the same period last year. The company’s partnerships with primary-care provider VillageMD and at-home health-care provider CareCentrix have contributed to this growth, with revenue from VillageMD increasing by 22% and sales at CareCentrix rising by 15% due to expanded service offerings.
To address these challenges, Walgreens is committed to its turnaround strategy aimed at driving sustainable core growth and delivering long-term shareholder value. CEO Rosalind Brewer remains confident in the company’s ability to achieve these goals.
Overall, while Walgreens has faced setbacks in its fiscal third quarter, the company is taking proactive measures to improve its financial performance and adapt to changing market conditions.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
