Healthy Greens

Healthy Greens

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  • Walgreens Boots Alliance (WBA, $33.65) on Thursday exceeded fiscal fourth-quarter sales expectations, as the drugstore chain turns itself into a more health-care-focused company. The drugstore chain said it anticipates full-year adjusted earnings per share of $4.45 to $4.65 in the coming fiscal year. The company’s shares rose over 5% Thursday.

  • It reported quarterly earnings per share of $0.80 each and revenues of $32.45bn, beating expectations of $0.77 per share and $32.09bn, respectively. Its pivot to becoming more health-care-centric saw sales decline year-on-year and, after including certain costs, actually swung to a net loss of $415.0M in the three-month period, compared to a net income of $627.0M a year earlier.

  • Walgreens has made significant investments to transform from a major drugstore chain to a large health-care company. It is opening hundreds of doctor offices with VillageMD. It invested $5.2B to become the majority owner of the primary-care company. It recently announced plans to accelerate acquisitions of two other companies: CareCentrix, which coordinates care and benefits for at-home care, and Shields Health Solutions.

Why it matters

Unlike big-box retailers, the drugstore chain does not depend on the sale of big-ticket items. It has expanded alternative revenue streams, including its advertising business. And CEO Roz Brewer stated it sells many “need now categories” from toothpaste to medication. However, Covid vaccines, which boosted Walgreens’ sales and foot traffic, have fallen off significantly.

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