An indication shows the varieties of COVID-19 vaccination doses obtainable at a Walgreens cell bus clinic on June 25, 2021 in Los Angeles, California.
Mario Tama | Getty Pictures
Walgreens Boots Alliance on Thursday exceeded analysts’ expectations for fiscal first-quarter earnings and raised its forecast for the yr, as clients got here to its shops for Covid booster photographs, at-home take a look at kits and first-time vaccinations for youngsters.
Regardless of that, shares fell as the corporate spoke of rising labor prices. Executives mentioned Walgreens should improve wages as pharmacy employees juggle prescription refills and administering vaccines. The corporate’s shares closed at $52.44 on Thursday, down 2.89%.
‘Stress within the system’
Walgreens Chief Monetary Officer James Kehoe mentioned the corporate will spend about $120 million extra on wages, as the pharmacy competes with different retailers in a decent labor market and tries to maintain up with demand. He mentioned the corporate is investing extra in labor, after a scarcity of employees contributed to “considerably softer” prescription volumes within the first quarter.
“There’s been a excessive stage of stress within the system,” he mentioned on the corporate’s earnings name.
The pharmacy chain raised its forecast for the yr, saying it now anticipates adjusted earnings per share to develop the low single digits as an alternative of being flat.
This is what Walgreens reported in contrast with what analysts had been anticipating for the primary quarter ended Nov. 30, primarily based on Refinitiv information:
- Earnings per share: $1.68 adjusted vs. $1.33 anticipated
- Income: $33.90 billion vs. $32.74 billion anticipated
Within the quarter, web revenue got here to $3.58 billion, or $4.13 per share, in contrast with a web lack of $308 million, or 36 cents per share, a yr earlier.
Excluding gadgets, the corporate earned $1.68 per share, topping the $1.33 anticipated by analysts surveyed by Refinitiv.
Gross sales rose to $33.90 billion from $31.44 billion a yr earlier, and had been greater than the $32.74 billion that analysts anticipated.
Extra booster photographs, on-line gross sales
Walgreens administered 15.6 million Covid vaccines within the first quarter — bringing its whole to greater than 56 million up to now. Its tempo of vaccinations accelerated from the earlier quarter, when it gave 13.5 million photographs, as adults got here for booster doses and children certified for first-time photographs. Covid vaccinations peaked at Walgreens within the third quarter of final yr, when it administered 17 million photographs.
To date, the corporate mentioned it has administered greater than 9 million booster photographs. It gave 6.5 million Covid exams within the first quarter.
Pandemic-related gadgets lifted its retail gross sales, too, as consumers purchased at-home Covid exams together with cough, chilly and flu drugs and wonder gadgets. Retail same-store gross sales, an business metric that tracks gross sales on-line and at shops open a minimum of a yr, rose 10.6% in contrast with the year-ago interval — the most important soar in additional than 20 years.
Within the pharmacy division, same-store gross sales elevated 6.8% versus the year-ago interval — with a lot of that coming from Covid vaccines.
Digital gross sales within the U.S. surged by 88% within the first quarter, as clients positioned 3.6 million same-day pickup orders within the three-month interval. These gross sales are typically bigger, with a median worth of $30 on-line versus $20 at shops, CEO Roz Brewer mentioned on the earnings name.
At its Boots enterprise in the UK, retail gross sales on-line and at shops open a minimum of a yr grew by 16.3% in contrast with the year-ago quarter. Digital gross sales at Boots within the first quarter practically doubled versus the identical quarter earlier than the pandemic — however foot visitors fell wanting pre-pandemic ranges, the corporate mentioned.
Flu photographs gained reputation, as Boots administered 2 million flu vaccines within the first quarter — a 150% improve in contrast with the year-ago interval.
Walgreens has seemed to health-care providers to drive long-term progress. It is opening physician workplaces with primary-care firm VillageMD, referred to as Village Medical, at a few of its shops. It’s turning a portion of some places into Walgreens Well being Corners, an space that is staffed by nurses and pharmacists who can seek the advice of with sufferers on persistent circumstances or different medical wants.
To date, the corporate mentioned it has opened 81 Village Medical places and 47 Walgreens Well being Corners. Walgreens mentioned it plans to have greater than 160 of the primary-care clinics and greater than 100 Well being Corners by the top of the calendar yr.
Like another retailers, Kehoe mentioned Walgreens has seen a better stage of theft from organized crime. He mentioned it has additionally observed rising inflation, however ought to have the ability to cross on most of these greater prices to clients.
Walgreens shares closed Wednesday at $54.00, up practically 1%. The corporate’s shares have risen 31% over the previous 12 months, bringing its market worth to $46.74 billion.
