Walgreens Boots Beats Estimates as Drugstores Endure Pandemic

(Bloomberg) -- Walgreens Boots Alliance Inc. beat analysts’ estimates for first-quarter earnings as the international drugstore chain saw sales withstand virus-related disruptions in the U.K. and the U.S.

• Adjusted earnings per share were $1.22, compared with the $1.03 average estimate of Wall Street analysts. Revenue rose 5.7% to $36.3 billion, compared with the average estimate of $34.9 billion. The company affirmed its guidance of low single-digit growth in fiscal 2021 adjusted earnings per share.

Key Insights

• U.S. sales reached $27.2 billion, up about 4% from the year earlier. Same-store sales rose slightly from the year-ago period, though lower foot traffic, weak cough, cold and flu sales, lower seasonal flu prescriptions and fewer new prescriptions weighed on results.
• Walgreens is facing rising pressure to quickly administer Covid-19 vaccines in U.S. nursing homes through a partnership with the government, an effort that’s come under criticism for missteps and delays. The chain will also vaccinate the wider public when more shots become available.
• Walgreens’ international retail pharmacy business recorded $2.6 billion in sales, down 6.2% from the year-ago quarter. Strict U.K. lockdowns that last spring hurt foot traffic at the company’s Boots drugstores are again threatening the chain. However, the company said Boots’ e-commerce business is performing well.

Market Reaction

Walgreens rose 4.4% in premarket trading. The shares lost 28% over the past 12 months through Wednesday’s close.

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