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DEERFIELD, Ill. — Walgreens Boots Alliance (WBA) sales in its third quarter declined 4.2% from a year earlier on flagging demand for vaccines and COVID-19 tests. Quarterly earnings also took a $683 million hit related to the company’s settlement with the state of Florida to resolve claims tied to the dispensing of prescription opioids, the company announced on June 30.
WBA last month also announced it had decided to keep its health and beauty retailer Boots as well as beauty supplier No7 Beauty Co., saying suitors had failed to present financial offers that adequately reflect the value of the U.K.-based enterprises.
Earlier this year, chief executive officer Rosalind Brewer said Walgreens was exploring strategic options for the businesses to allow the company to focus on its Walgreens Health segment as it invests in primary care clinics in Walgreens stores.
Brewer said she and Walgreens directors remain “open to all opportunities to maximize shareholder value for these businesses and across our company.”
With fewer customers coming into its stores, Walgreens posted net income of $289 million in the three months through May 31, compared to $1.2 billion in last year’s third quarter. Walgreens administered 4.7 million COVID-19 vaccinations in the quarter, compared with more than 17 million in the comparable period last year.
Business was also down at the company’s AllianceRx Walgreens specialty and home-delivery pharmacy.
The company’s adjusted earnings per share of 96 cents topped analysts’ forecast of 92 cents, while its revenue of $32.6 billion exceeded the predicted $32.06 billion.
Comparable retail sales increased 1.4%. Excluding tobacco and e-cigarettes, comparable retail sales rose 2.4%, an increase that Walgreens said reflects a 7.9% sales gain in health and wellness, a category aided by at-home COVID-19 tests, over-the-counter cold and flu remedies, and personal care merchandise.
Comparable pharmacy sales increased 22% in the quarter, while comparable prescriptions filled declined 1.8%. Total prescriptions filled declined 2.5% to 304 million, including immunizations, adjusted to 30-day equivalents. Front-store sales increased 1%.
WBA reiterated its full-year guidance for adjusted EPS growth in the low single digits.
WBA has nearly 9,000 retail pharmacy stores in the United States, Puerto Rico and the U.S. Virgin Islands. It also has 2,300 Boots locations in the United Kingdom, Ireland and Thailand.
“WBA delivered strong execution across operating segments and against very robust growth last year,” Brewer said in a statement. “Third quarter results were broadly in line with our expectations, demonstrating the resilience of our business through our deep community connections and relevance to consumers. Walgreens Health achieved 65% pro-forma sales growth, with progress on several fronts, including adding Buckeye Health Plan as a strategic partner, already exceeding our 2022 target for covered lives, and launching our clinical trials business. With our decision to conclude the Boots strategic review, I firmly believe that our strategic actions are working to deliver long-term shareholder value.”
