Walgreens reports decline in 3Q sales amid waning COVID impact
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Walgreens Boots Alliance (NASDAQ:WBA) is trading lower in the pre-market Thursday despite better-than-expected revenue and earnings posted by the pharmacy retail chain with its 3Q financials for fiscal 2022.
Sales from the companyâs continuing operations dropped ~4% YoY on a reported basis to $32.6B marking the first topline contraction since 4Q fiscal 2020. Walgreens (WBA) attributed the underperformance to the sales decline at its home delivery pharmacy AllianceRx Walgreens.
During the quarter, the company had administered 4.7M COVID vaccines and 3.9M tests compared to 11.8M vaccinations and 6.6M tests in the preceding quarter, indicating a further weakening in pandemic-related benefits.
Driven by an 11-percentage point impact from the AllianceRx Walgreens business, the U.S. sales dropped ~7% YoY to $26.70B sales, falling short of Street forecasts at $26.78B.
U.S. reported ~2% growth in retail comparable sales excluding tobacco, while Boots UK retail comparable sales climbed ~24%.
Despite the eighth consecutive quarterly beat, non-GAAP EPS fell ~30% YoY to $0.96 as the prior year period recorded ~94% YoY growth in adj. EPS indicating peak COVID-19 vaccine volumes.
For fiscal 2022, Walgreens (WBA) maintained its adjusted EPS guidance of low-single digit growth, noting that the YTD performance was in line with expectations.
In terms of capital allocation, the company has sold 6M shares of AmerisourceBergen (ABC) common stock raising $900M. Walgreens (WBA) said that it would issue notices for early repayment of more than $730M worth of 2022 notes due in July.
âThird quarter results were broadly in line with our expectations, demonstrating the resilience of our business through our deep community connections and relevance to consumers.,â Chief Executive Rosalind Brewer noted ahead of the conference call at 8:30 a.m. EST.
âWith our decision to conclude the Boots strategic review, I firmly believe that our strategic actions are working to deliver long-term shareholder value," she added.
Walgreens (WBA) shares fell Tuesday after the company announced it would end plans to sell Boots drugstore chain in the U.K.