Anew CEO took over at Walgreens in mid March.
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The drugstore giant Walgreens Boots Alliance turned in higher earnings than expected on Wednesday morning, reporting a profit of $1.40 per share, compared with the consensus call of $1.10 among analysts tracked by FactSet.
Walgreens (ticker: WBA) reported sales of $32.8 billion, below the consensus estimate of $36.6 billion. But the company said that the sales were up 3.5% compared with the same quarter last year on a constant currency basis, excluding sales from discontinued operations.
The company also increased its financial forecasts for 2021, now saying it expects “mid-to-high single digit growth” in constant currency adjusted earning per share in 2021, up from its previous estimate of “low single-digit growth.”
“Overall, we have achieved a good financial quarter with results well ahead of expectations, despite significant impacts from COVID-19, and we have raised our full-year EPS guidance,” the company’s new CEO, Rosalind Brewer, said in a statement. “I am optimistic about our ability to drive sustainable, long-term value for our shareholders, while acknowledging that there is still work to be done to stabilize the base business.”
Walgreens shares were up 2.5% in pre-market trading.
“Dare we say it? A good WBA print?” wrote Evercore ISI analyst Elizabeth Anderson in a note out early Wednesday.
The pandemic smashed Walgreens shares: The stock fell 32.4% in 2020 while the S&P 500 climbed 16.3%. This year has gone better, so far, for Walgreens investors, with shares climbing 32.8%. Walgreens is now trading at $52.98 per share, a level it hasn’t reached since February 2020.
Walgreens said that the situation “continues to be fluid” in the second half of its fiscal year due to Covid-19.
The company said that U.S. retail sales were down 6.6% compared with the same quarter last year, but that comparable retail sales, after adjusting for the impact of 2020’s leap day and a store-optimization program, were down 3.5%.
It is Brewer’s first earnings report as CEO. She succeeded former CEO Stefano Pessina on March 15.
“I will continue to review closely all our initiatives, strategies and opportunities to capitalize fully on the incredible potential in front of us,” Brewer said, in a statement. “Our team will move swiftly and decisively” to serve the needs of patients, customers, and communities.
Walgreens stock trades at 10.4 times the per-share earnings expected over the next 12 months, slightly below its 5-year average of 11.5 times. Of the 21 analysts who cover the stock tracked by FactSet, 16 rate it a Hold. Two rate it Overweight or Buy, and three rate it Underweight or Sell.
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