COVID-19 vaccines give Walgreens an edge
Walgreens raised its annual profit targets for 2022
Walgreens raised its full-year outlook after beating Wall Street earnings expectations for the first quarter largely due to COVID-19 vaccinations, boosters and tests.
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The retailer posted first quarter sales of $33.9 billion, up 7.8% year-over-year, on a quarterly profit of $3.6 billion, or $4.13 per share, up from a loss of $391 million, or 45 cents per share, a year ago. Adjusted EPS from continuing operations was $1.68.
Walgreens said it administered 15.6 million vaccinations and 6.5 million tests in the first quarter. It has also administered over 9 million booster doses to date.
Looking ahead, Walgreens is now forecasting adjusted earnings per share guidance of low-single digit growth, up from flat previously.
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The company's U.S. segment posted first quarter sales of $28 billion, up 3.2% year-over-year, held back by a decline in the AllianceRx Walgreens Prime business. Comparable sales increased 7.9% from the year-ago quarter, pharmacy sales excluding the AllianceRx Walgreens Prime business grew 5.8% year-over-year and comparable pharmacy sales climbed 6.8% year-over-year.
Walgreens' U.S. retail sales climbed 10.1% year-over-year and comparable retail sales increased 10.6% year-over-year. Excluding, tobacco and e-cigarettes, comparable retail sales surged 11.7%. The health and wellness category jumped 24.7%, aided by at-home COVID-19 tests and cough cold flu, and beauty and personal care increased 16.6% and 11.6%, respectively. U.S. digital sales grew 88%, fueled by 3.6 million same day pick-up orders in the quarter.
Meanwhile, the Walgreens Health segment, which consists of its VillageMD and Shields acquisitions, saw first quarter sales of $51 million and adjusted gross profit of $20 million. Walgreens has opened 81 VillageMD centers and 47 Walgreens Health Corners, with plans to open more than 160 VillageMD locations and more than 100 Walgreens Health Corners by the end of fiscal year 2022.
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In addition, the company launched the Walgreens Health consumer app with Blue Shield of California and Clover Health and plans to close its acquisition of CareCentrix in the third quarter.