Lower COVID-19 vaccine, testing sales push Walgreens to rough fiscal 3Q

DEERFIELD, Ill. — Walgreens slashed its earnings forecast for the year and raised a cost-cutting goal after missing analyst profit expectations in its fiscal third quarter.

Shares of the drugstore chain tumbled early today after the company said it was hurt in part by significantly lower COVID-19 vaccine and testing sales.

Walgreens now expects full-year adjusted earnings to range from $4 to $4.05 per share. That’s down from a previous forecast range of $4.45 to $4.65 per share. It’s also well below Wall Street expectations.

Analysts forecast adjusted earnings of $4.44 per share for the fiscal year, which ends in August, according to FactSet.

CEO Rosalind Brewer said in a statement from the company that the new forecast takes “an appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year.”

The company said it was raising its cost management program target to $4.1 billion in total savings from $3.5 billion.

Walgreens’ profit fell 59% to $118 million in the fiscal third quarter, which ended May 31.

The Deerfield-based company reported earnings, adjusted for one-time gains and costs, of $1 per share.

The results did not meet Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.06 per share.

The drugstore chain posted revenue of $35.42 billion in the period, exceeding Street forecasts. Six analysts surveyed by Zacks expected $33.79 billion.

Walgreens shares fell 7%, or $2.21, to $29.38 before markets opened today.