Vaccinations, tests give Walgreens a boost in first quarter

COVID-19 vaccines and testing boosted Walgreens store sales growth to levels not seen in more than two decades, pushing the drugstore chain well above Wall Street expectations for the first quarter.

Walgreens doled out 15.6 million vaccines in the quarter that ended in Nov. 30, up 16% from the previous quarter, as more Americans sought booster shots. Also, federal regulators expanded eligibility for Pfizer’s vaccine to children ages 5 to 12.

The company administered 6.5 million COVID-19 tests in the first quarter, which ended before the omicron variant of the virus sent case numbers soaring in the United States and stoked the need for testing even higher. Sales from Walgreens’ established U.S. stores shot up more than 10% compared to the previous year’s fiscal quarter, which ended before mass vaccine distribution began.

That was the highest level of growth in more than 20 years, according to the company based just outside of Chicago in Deerfield, Ill.

Walgreens earned $3.58 billion in the quarter compared with a loss of $308 million the previous year when the company booked a big charge tied to its stake in the drug wholesaler AmerisourceBergen.

Shutdowns and other ramifications from the pandemic delivered a hit of around $300 million to adjusted operating income in that quarter.

Adjusted earnings totaled $1.68 per share in the most recent quarter, and revenue grew nearly 8% to $33.9 billion.

Analysts expected, on average, earnings of $1.36 per share for the company’s fiscal first quarter. They also forecast $32.88 billion in revenue, according to FactSet.

Walgreens Boots Alliance Inc. runs more than 13,000 stores mainly in the United States and the United Kingdom. It also has a presence in China through an investment in a company that owns and operates several thousand stores there.

The company also booked 16% growth in sales from its established Boots stores in the United Kingdom but said customer visits to those stores remained below pre-pandemic levels.

Company shares rose more than 2% before the opening bell today.