Boots-Owner Maintains Full-Year Profit Forecast; Shares Rise
Walgreens Boots Alliance Inc kept its full-year earnings forecast unchanged on Thursday, even as it anticipates a hit to current quarter earnings from the COVID-19 pandemic, sending its shares up nearly 4% in premarket trading.
The company has taken a number of steps to boost profitability after the health crisis hammered sales and forced it to cut jobs, shut some UK-based Boots stores and sell its distribution unit to AmerisourceBergen Corp for $6.5 billion.
Walgreens maintained fiscal 2021 forecast of low single-digit growth in adjusted EPS, after it beat analysts' estimates for adjusted first-quarter profit driven by higher sales at its retail pharmacy stores and robust prescription volumes.
Same-store sales at its U.S. pharmacies rose 3.7% in the quarter as it filled 297.3 million prescriptions. Boots UK pharmacies recorded a 2.5% rise in the sales.
The company, which had been expecting a boost from the distribution of COVID-19 vaccinations, said the opportunity is likely to be offset by the pandemic related lockdowns and restrictions.
Walgreens and rival CVS Health Corp have an agreement with the federal government to vaccinate nursing home residents across the country through a voluntary program.
Lockdowns could result in a bigger hit to Walgreens' profit compared to any boost from the company's role in vaccine distribution, Chief Financial Officer James Kehoe said in October.
Excluding items, the company earned $1.22 per share, while analysts were expecting a profit of $1.03 per share, according to Refinitiv IBES.
Revenue rose to $36.31 billion from $34.34 billion.