The ongoing COVID-19 pandemic helped drive Walgreens Boots Alliance to a Wall Street beat on earnings and sales in the first fiscal quarter, with a strong retail performance partly attributable to coronavirus testing and vaccinations.
Company net earnings from continuing operations were $3.58 billion, or $4.13 per diluted share, Walgreens announced, versus a loss from continuing operations of $391 million, or 45 cents per diluted share, in the year-earlier period.
Adjusted for one-time events, company earnings from continuing operation were $1.46 billion, or $1.68 per diluted share, versus $948 million, or $1.09 per diluted share, in the year-prior period.
Walgreens topped a MarketBeat-published analyst consensus diluted earnings per she estimate of $1.22 and a revenue estimate of $32.87 billion.
Walgreens sales from continuing operations increased 7.8% from the year-past quarter to $33.9 billion, which represents a 7.6% advance on a constant currency basis.
Operating income from continuing operations was $1.28 billion in the quarter compared to an operating loss of $535 million in the year-previous period. Adjusted operating income from continuing operations was $1.77 billion, an increase of 48.5% on a constant currency basis, Walgreens reported.
Sales in the United States business segment gained 3.2% in the quarter year over year to $28 billion with comparable sales up 7.9%, Walgreens indicated. With the tobacco and e-cigarettes segments excluded from consideration, comparable retail sales increased 11.7%, reflecting broad-based growth across all categories, Walgreens stated. In particular, health and wellness has a big quarter, up 24.7% from the 2020 quarter aided by at-home COVID-19 tests and cough cold flu. Beauty and personal care increased 16.6% and 11.6% in the period year over year, respectively.
Walgreens CEO Rosalind Brewer said in a conference call that COVID-19 testing and vaccinations have provided significant tailwinds for Walgreens’ business. She pointed out that the company plans to continue growing the vital service then build on the platform developed to provide a wider range of testing and diagnostic solutions for customers.
In the call, John Standley, Walgreens president, said retail sales strength arose from positive performances in over-the-counter drugs, beauty and personal care, and significant success with mass personalization efforts as well as some cross-over from vaccine and testing efforts.
James Kehoe, Walgreens CFO, said the company would work to cut what he identified as 15 cents per share shrink but noted that Congress, which is considering the INFORM Consumers Act, would have to step up and address a problem that has become worse in the pandemic and is inflating that particular cost: organized retail crime.
In announcing the financial results, Brewer said, “First quarter results exceeded our expectations, with a very encouraging performance across all our business segments. I am particularly excited about the progress we’re making in building out Walgreens Health. Our majority investments in VillageMD and Shields closed during the quarter, and we’re rolling out VillageMD primary care co-locations and Walgreens Health Corners at pace. The strong start to the fiscal year reinforces our confidence in the future, and as a result, we are raising our guidance for the full year and increasing investments in our people. Looking ahead, we are well-positioned for sustainable, long-term value creation.”