Walgreens Quarterly Sales Fall on Fewer Prescriptions, Covid-19 Vaccinations
said it is counting on its burgeoning healthcare business to fuel profit growth in coming years as drugstore sales sputter.
The nation’s second-biggest drugstore chain posted a 5.3% drop in revenue in its recently completed quarter as it filled fewer prescriptions and administered fewer Covid-19 vaccinations. A shortage of pharmacists and pharmacy technicians continued to hamper sales as hundreds of stores are operating with reduced hours because they lack staff to remain open.
Still, quarterly revenue came in better than analysts expected, helping send shares up about 6% in Thursday trading. The company’s shares are down about 35% this year, compared with a 17% decline in the Dow Jones Industrial Average.
Executives on Thursday said the company’s new healthcare unit, which includes recently acquired VillageMD primary-care provider, is expected to fuel growth in the business over the next few years. The unit also includes home-health benefits manager CareCentrix, which Walgreens said earlier this week it would fully acquire after taking a majority stake in the company in August.
John Driscoll,
the chief executive of CareCentrix, was named president of Walgreens’s U.S. healthcare unit. The company on Thursday raised its outlook for the unit, expecting revenue of $11 billion to $12 billion in three years. Healthcare revenue totaled $622 million in the most recent quarter, or about 2% of overall sales.
For now, the Deerfield, Ill., company’s retail pharmacies, while key to its healthcare ambitions, are still the main driver of the business. In the recent quarter, the company provided 2.9 million Covid-19 vaccinations and 3.4 million PCR tests in the period. This compares with 13.5 million vaccinations in the same period a year earlier.
The unit was also weighed down by declines in AllianceRX Walgreens, the company’s specialty and home-delivery pharmacy division.
Overall, Walgreens logged $32.4 billion in revenue in the fourth quarter ended Aug. 31, slightly ahead of the $32.09 billion expected by analysts recently polled by FactSet.
The company posted a net loss of $415 million, or 48 cents a share, compared with a profit of $358 million, or 41 cents, for the prior year. Walgreens said it registered a nearly $800 million impairment charge related to its U.K. pharmacy chain business in the quarter, as well as higher costs related to a restructuring plan.
On an adjusted basis, excluding costs such as those connected with the acquisition of Shields Health Solutions, the company said earnings were 80 cents a share. Analysts expected 77 cents a share.
For the current fiscal year, which started Sept. 1, Walgreens said it expects adjusted per-share earnings of between $4.45 and $4.65, which compares with Wall Street expectations for $4.51 a share.
Sharon Terlep contributed to this article.
Write to Sabela Ojea at sabela.ojea@wsj.com
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