Walgreens Boots Alliance is out of favor on Wall Street. But Thursday’s strong fiscal third-quarter results suggest that attitude should soften in the months ahead.
The pharmacy giant reported sales of just over $34 billion and adjusted earnings of $1.38 a share in the quarter that ended in May; both figures topped analyst estimates. Walgreens also raised its full-year earnings guidance to about 10% growth from a year earlier. That is the second straight quarter it has raised its outlook since new Chief Executive Rosalind Brewer took over the top job in March.
Evidently, actual shareholders had expected more than did the analysts: The stock fell 6% in morning trading. But it has also rallied about 50% since last September, when shares reached a multiyear low.
Stronger prescription growth was key to results: Comparable prescriptions grew nearly 10% from a year earlier in the U.S. That growth came primarily from Covid-19 vaccinations administered by the company.
But the higher vaccination rate meant more patients returned to doctors’ offices as well. During the pandemic, new prescription volumes were especially weak as patients deferred nonemergency medical care. Those deferrals hampered results for all sorts of healthcare businesses, and pharmacies were no exception. Over time, patients will likely catch up on most of that deferred care.