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03/31/2022

Walgreens Boots Alliance’s strong Q2 led by surge in COVID-19 tests, vaccinations

The company reported strong execution in its business segments led by COVID-19 vaccinations and testing.

Walgreens Boots Alliance shared its second-quarter earnings, which ended Feb. 28 and showed strong execution with continued progress on strategic priorities, the company said.

The Deerfield, Ill.-based company reported that its second-quarter earnings per share from continuing operations was $1.02, a decrease compared with an EPS of $1.06 in the year-ago quarter.

Second-quarter sales from continuing operations increased 3% percent over the year-ago quarter to $33.8 billion, up 3.8% on a constant currency basis, and income from continuing operations increased to $1.2 billion, compared with operating income of $832 million in the year-ago quarter. Adjusted operating income from continuing operations increased to $1.7 billion, up 35.9% on a constant currency basis.

[Read More: Walgreens, VillageMD to open clinics in New Hampshire]

The performance reflects sales growth at Walgreens and in the international segments, and sales contributions from the Walgreens Health segment due to the recent acquisition and consolidation of VillageMD and Shields, partly offset by a decline in sales at AllianceRx Walgreens, the company said.

In addition, the increases in operating income and adjusted operating income from continuing operations reflect strong adjusted gross profit growth across both pharmacy and retail in the United States and a continued rebound in International segment sales and profitability, partly offset by growth investments in Walgreens Health.

“Second quarter results demonstrated broad-based execution, driving strong comparable sales and robust earnings growth. We continue to make important strides along our strategic priorities, building a consumer-centric, technology-enabled healthcare enterprise at the center of local communities,” CEO Rosalind Brewer said. “VillageMD and Shields are delivering tremendous pro forma sales growth compared to their year-ago standalone results, and our Walgreens Health segment is on track toward long-term targets. The strategic review of our Boots business is progressing, and our transformational actions are accelerating sustainable value creation.”

[Read More: Walgreens SVP, general counsel to depart]

Net earnings from continuing operations were $883 million in the second quarter compared to $922 million in the year-ago quarter, and adjusted net earnings from continuing operations increased 25.8% to $1.4 billion, up 26.4% on a constant currency basis compared with the year-ago quarter.

Sales from continuing operations in the first six months of fiscal 2022 were $67.7 billion, an increase of 5.4% from the same period a year ago, and an increase of 5.7% on a constant currency basis, reflecting strong comparable sales growth at Walgreens and in the International segment, the company said.

Across its business segments, the company reported strong execution led by COVID-19 vaccinations and testing. Comparable retail sales in the United States were up 14% and comparable retail sales for Boots U.K. were up 22% with share gains across all major categories.

[Read More: U.K.-based Boots pharmacy reportedly sets bid deadline]

Staying on the topic of COVID-19, Walgreens administered more than 62.8 million vaccines to date, with 11.8 million happening in the second quarter.

Alongside its Q2 results, WBA also shared several business highlights, which included the development of Walgreens Health, refocusing its portfolio, and building a high-performance culture and team, the company said.

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