Walgreens returns to profitability as business rebounds from coronavirus lockdowns

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Walgreens Boots Alliance returned to profitability in the three months through August as business gradually recovered in key markets that were hit hard by the COVID-19 pandemic.

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The Deerfield, Illinois-based drugstore chain reported a fourth-quarter profit of $373 million, or an adjusted $1.02 per share, outpacing the 96 cents that Wall Street analysts surveyed by Refinitiv were expecting. COVID-19 had an estimated adverse impact of 46 cents per share.

The company lost $1.7 billion in the previous quarter as lockdowns aimed at slowing the spread of the virus curbed sales by $700 million to $750 million.

TickerSecurityLastChangeChange %
WBAWALGREENS BOOTS ALLIANCE INC.35.91-0.27-0.75%

“Despite uncertainty amid the global COVID-19 pandemic, we are seeing gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business,” CEO Stefano Pessina said in a statement. “I'm also encouraged by the accelerating growth in our e-commerce platforms.”

Boots.com sales surged 155% and Walgreens.com sales increased by 39%. Overall, revenue rose 2.3% year-over-year to $34.7 billion, ahead of the $34.37 billion that was anticipated.

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Retail pharmacy sales in the U.S. grew 3.6% from last year to $27 billion amid improved retail sales and prescription trends.

International pharmacy sales totaled $2.3 billion, down 15%, largely due to weakness in the U.K. Retail same-store sales in the U.K were off 29%, but that was an improvement from the 48% drop in the third quarter.

Walgreens' pharmaceutical wholesale business reported sales rose 4.3% from a year earlier to $6 billion amid strength in Germany and France.

The company's full-year profit was down 89% versus last year to $456 million, or an adjusted $4.74 per share. Revenue edged up 2% to $139.5 billion.

For fiscal year 2021, Walgreens sees adjusted earnings per share growing in the low single-digits.

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Shares were down 39% this year through Wednesday, lagging the S&P 500's 7.98% gain.

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