Walgreens Boots Alliance lost $308 million in its first fiscal quarter due to a big charge tied to its ownership stake in the drug wholesaler AmerisourceBergen.
The drugstore chain also saw COVID-19 continue to eat away at its business, particularly in the United Kingdom, but the company’s overall performance topped Wall Street expectations.
Walgreens said today that it booked a $1.5 billion charge in the quarter from its equity earnings in AmerisourceBergen. Walgreens has a roughly 30% stake in the company, and the charge accounted for Walgreens’ portion of a recent AmerisourceBergen quarterly loss, a spokeswoman said.
Walgreens runs more than 21,000 stores mainly in the United States and United Kingdom. Its drugstores and the stores of other retailers were hit hard last year, particularly in the spring, by a global pandemic that kept customers away.
Walgreens said it still felt the pandemic in its fiscal first quarter, with fewer customer visits and new prescription starts as people made fewer trips to the doctor. It also saw weaker sales of products to help with colds, coughs and the flu.
In the United Kingdom, sales at Boots stores opened at least a year dropped 9% compared to the previous year. A rebound in customer visits last fall was set back in November by the re-introduction of stricter government restrictions, the company said.
Walgreens and rival CVS Health Corp. have administered thousands of COVID-19 vaccinations at nursing homes and other long-term care locations since last month, and the drugstore chains expect to play a big role in doling out shots when they become available to more people later this year.
But Walgreens said gains from those shots will likely be countered in part by pandemic-related lockdowns or restrictions.
Company officials said last fall that they expect the pandemic’s impact on their business to subside in the second half of the fiscal year.
Overall, Walgreens booked adjusted earnings of $1.22 per share in the quarter that ended Nov. 30. Revenue grew nearly 6% to $36.31 billion.
Analysts expected, on average, earnings of $1.02 per share on $34.93 billion in revenue, according to Zacks Investment Research.
The company also repeated a forecast for low, single-digit adjusted earnings per share growth in its new fiscal year.
Shares of Walgreens Boots Alliance Inc. climbed more than 3% to $44.48 in early-morning trading.