Walgreens (WBA) Q3 2022 earnings

Walgreens store at State and Randolph Streets in Chicago.

Rock Nancy | Chicago Tribune | Tribune News Service via Getty Images

Walgreens Boots Alliance on Thursday reported quarterly revenue and earnings that beat expectations as its retail sales rebounded and online purchases picked up.

But shares fell about 2% in pre-market trading, as demand for a Covid-19 vaccine faltered and the company reiterated rather than raised its forecast for the year. It said it expects adjusted earnings per share to grow in the low single digits.

Here’s what the company reported versus what analysts expected for the three-month period ending May 31, based on Refinitiv data:

  • Earnings per share: 96 cents adjusted versus 92 cents expected
  • Turnover: $32.6 billion vs. 32.06 billion USD expected

For the quarter, net income fell to $289 million, or 33 cents per share, from $1.2 billion, or $1.38 per share, a year earlier. The sharp drop reflects the $683 million fee related to the opioid settlement with the state of Florida, a drop in US drug sales as it obtained large volumes of the Covid-19 vaccine one-on-one. previous years and investments in expanding the healthcare business.

Excluding items, the company earned 96 cents per share, exceeding the 92 cents expected by analysts surveyed by Refinitiv.

Revenue drops to $32.6 billion from $34.03 billion a year earlier. Analysts had expected $32.06 billion.

Walgreens increased sales during the pandemic as customers went to its stores to buy vaccines and get tested for Covid-19. That demand is dwindling, prompting the company to drive growth in other ways.

The company administered 4.7 million vaccines in the third quarter, down sharply from 15.6 million in the first quarter and 11.8 million in the second quarter.

Healthcare has become a big driver, with Walgreens reached an agreement with VillageMD opened hundreds of doctor’s offices in its stores.

Walgreens has also expanded online options, such as curbside pickup and delivery, to try to prevent customers from buying toothpaste, soap and other items from online players like Amazon. The company said its digital options grew in popularity during the quarter, up 25% from a year ago, on top of 95% growth in the year-ago period. The company said this growth was driven by 2.8 million pickup truck orders for the day.

In the US and UK, retail sales increase as consumers leave and return. Same-store sales in the US rose 2.4%, excluding tobacco, and 24% for Boots UK retail.

Earlier this week, Walgreens said it would halted plans to sell UK-based Boots business, citing market instability. The company said in January that it has consider strategic options for that divisionincluding a possible sale.

As of late Wednesday, shares of Walgreens are down about 22% so far this year. Shares closed Wednesday at $40.87, bringing the company’s market value to $35.30 billion.

Read the company’s earnings release here.

This story is evolving. Please check back for updates.

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