Walgreens swings to a profit, raises forecast as it looks to accelerate growth under new CEO


A person walks outside Duane Reade by Walgreens in Hell's Kitchen on May 26, 2021 in New York City.
Noam Galai | Getty Images

Walgreens Boots Alliance raised its outlook for the year and unveiled its turnaround plans on Thursday, after a stronger than expected fiscal third-quarter.

The drugstore chain said it now anticipates about 10% growth in constant currency adjusted earnings per share from continuing operations, after getting more clarity about the financial impact of Covid-19 vaccinations. It had previously forecast growth in the mid-to-high single digits.

Shares were up about 3% in premarket trading.

The company is in the midst of a turnaround led by its new CEO Roz Brewer, the former chief operating officer of Starbucks. On Thursday, it said it would drive growth by turning stores into neighborhood health destinations, accelerating its focus on digital, adding ways to personalize its retail offering for customers and stepping up its cost management.

“This quarter's results demonstrate continued momentum, and while challenges lie ahead, we are in a strong position to grow and innovate our core retail and pharmacy businesses for the future,” Brewer said in a press release.

Here's what Walgreens reported compared with what analysts were expecting for the third quarter ended May 31, based on Refinitiv data:

  • Earnings per share: $1.51 adjusted vs. $1.17 expected
  • Revenue: $34.03 billion vs. $33.76 billion expected

In the quarter, Walgreens posted a net profit of $1.20 billion, or $1.38 per share, compared with a net loss of $1.71 billion, or $1.95 per share, a year earlier.

Excluding items, the company earned $1.51 per share, higher than the $1.17 expected by analysts surveyed by Refinitiv.

Sales rose to $34.03 billion from $30.36 billion a year earlier, exceeding the $33.76 billion that analysts expected.

As of Wednesday's close, Walgreens shares are up about 32% so far this year. Shares closed Wednesday up 1.19% to $52.61. The company's market value is $45.48 billion.

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