Fiscal Third Quarter Highlights
Despite the earnings miss, Walgreens topped revenue expectations as sales grew 8.6% YoY to $35.42 billion, exceeding the expected $34.24 billion as retail pharmacy and health-care segments expanded. However, due to a lower operating income, the resulting net profit amounted to $118 million as it tanked a 59% YoY, with adjusted EPS of $1.00, below the expected $1.07.
The U.S. retail pharmacy segment brought in $28 billion in sales as it grew 4.4% YoY with comparable sales at individual locations increasing 7% YoY. Pharmacy sales also increased 6.3% YoY with comparable rising nearly 10% due to price inflation in brand medications.
Total number of filled prescriptions rose only 0.1% for a total of 305 million with Covid vaccines administered during the period plummeting 83% YoY from 4.7 million to 800,000.
U.S. health-care segment contributed $2 billion to total revenue, which is $1.4 billion more compared to last year’s quarter. CEO Rosalind Brewer stated that the company will be increasing its cost-cutting program to $4.1 billion while working to improve profitability of the whole segment.
The partnership with primary-care provider VillageMD was a bright spot, with revenue growing 22%. At-home health-care provider CareCentrix saw sales rising 15%, with the increase being owed to additional service offerings.
Full Year Guidance
Walgreens lowered its earnings guidance to a range between $4.00 to $4.05 per share while the prior forecast was in the range between $4.45 to $4.65 per share.
Even with the delay, the Amazon threat is looming
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