Walgreens Reports Stronger-Than-Expected 1Q Sales as Vaccine Distribution Under Way

By Micah Maidenberg

Walgreens Boots Alliance Inc. on Thursday reported a loss for its latest quarter the company said was tied to its stake in AmerisourceBergen Corp.

The drugstore chain on Thursday said it lost $308 million, or 36 cents a share, for its fiscal first quarter that ended Nov. 30, compared with a profit of $845 million, or 95 cents a share, for the year-earlier period.

Walgreens said it recorded a charge of $1.73 a share tied to its equity investment in health-products distributor AmerisourceBergen during the latest quarter, a move that weighed on earnings.

After adjustments, Walgreens reported earnings of $1.22 a share, ahead of the $1.03 a share that analysts expected for that metric, according to FactSet.

Sales rose to $36.31 billion for the quarter, from $34.34 billion, surpassing the $34.93 billion consensus estimate for the latest period.

Retail-pharmacy sales for its U.S. business rose 3.9% in the quarter, to $27.2 billion. Pharmacy sales on a comparable basis were up 5% year over year, but 0.4% for other retail items.

"The estimated adverse Covid-19 impact on comparable sales included lower foot traffic in stores, weak retail cough, cold and flu sales, lower seasonal flu scripts and reduced new-to-therapy scripts," Walgreens said.

On Wednesday, Walgreens Boots said it agreed to sell for $6.5 billion the majority of its pharmacy wholesale unit to AmerisourceBergen. It also owns a stake in the distributor.

Walgreens plans to use proceeds from the sale to lower debt and acquire businesses to bolster its health offerings at its pharmacies, Chief Executive Stefano Pessina said in an interview Wednesday with The Wall Street Journal.

Walgreens also said Wednesday that any gains generated by the distribution of Covid-19 vaccines during its new fiscal year will likely be offset by pandemic-related lockdowns and restrictions. But increased investments in growth-related projects should help, the company said.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

January 07, 2021 07:38 ET (12:38 GMT)

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