Walgreens Q4 sales, earnings top Street; predicts 2021 profit growth

Walgreens Boots Alliance Inc. reported better-than-expected fourth-quarter earnings and sales even as the pandemic continued to cut into its income. 

Net income fell nearly 45% to $373 million, or $0.43 a share, for the quarter ended Aug. 31, from $677 million, or $0.75 a share, in the year-ago period. Adjusted earnings per share fell 28.2% to $1.02, ahead of analysts’ estimates of $0.96. Walgreens estimated that the impact of the pandemic cut about $520 million from its operating income.

Sales rose 2.3% to $34.75 billion, beating estimates of $34.37 billion. Retail pharmacy sales in the U.S. increased 3.6% to $27.0 billion. Same-store sales rose 3.6% and prescriptions filled rose 1.6%. 

Retail pharmacy international sales fell 14.9% to $2.3 billion, compared with expectations of $2.2 billion, and pharmaceutical wholesale sales grew 4.3% to $6.0 billion.

For the full year, Walgreens’ sales increased 2% to $139.5 billion. Net earnings decreased 88.5% to $456 million.

“Despite uncertainty amid the global COVID-19 pandemic, we are seeing gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business,” said executive vice chairman and CEO Stefano Pessina. “I'm also encouraged by the accelerating growth in our e-commerce platforms. Now, more than ever, our pharmacy-centered business is at the heart of community healthcare and we are expanding on that role for the future.”

Looking ahead, Walgreens is projecting adjusted EPS growth in fiscal 2021. 

"While the company anticipates a gradual reduction in COVID-19 impacts, the first half results will continue to be negatively impacted when compared with the pre-COVID-19 first half of fiscal 2020," the company said in a statement. "However, for the second half, the company anticipates strong adjusted EPS growth, as these effects subside and recovery plans take hold in key markets.”