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Walgreens profit slides as Covid-19 vaccinations fade in Q2

The pharmacy giant also booked a $306-million pre-tax charge for opioid claims and some costs tied to cost cutting and an acquisition

The entrance to a Walgreens is seen on October 14, 2022, in Boston.
The entrance to a Walgreens is seen on October 14, 2022, in Boston.Michael Dwyer (AP)

A decline in Covid-19 vaccinations and an opioid settlement cut into Walgreens second-quarter earnings, but the drugstore chain still delivered better-than-expected results.

Walgreens said Tuesday that it administered 2.4 million vaccinations in its recently completed fiscal second quarter. That’s down from 11.8 million delivered in last year’s quarter, while the omicron variant of the coronavirus was surging.

Walgreens also booked a $306-million pre-tax charge for opioid claims and some costs tied to cost cutting and an acquisition.

Quarterly net income tumbled 20% to $703 million. Adjusted earnings were $1.16 per share, which is 6 cents better than expected, according to a survey of analysts by FactSet.

Sales climbed 3% to $34.86 billion, which was also better than expected.

Walgreens Boots Alliance Inc. runs a network of around 13,000 drugstores globally, with most of its locations in the United States. It’s stores also have become a growing source for care.

The company is opening primary care practices next to some locations with the goal of having drugstores and doctor offices work together to help keep patients healthy instead of just treating them when they become sick.

That’s an approach that is growing popular with bill payers like employers and insurers.

But the drugstore chain and its competitors are struggling to find enough employees to run its U.S. pharmacy counters. Walgreens has had to reduce pharmacy operating hours. The company said Tuesday that it returned about 500 stores to normal hours. But around 1,900 still were affected at the end of the quarter.

Walgreens Boots Alliance Inc. also said Tuesday that it was maintaining a full-year forecast it first laid out last fall for adjusted earnings that range between $4.45 to $4.65 per share.

For the full year, analysts expect earnings of $4.50 per share, according to FactSet. Mizuho Securities analyst Ann Hynes said in a recent note that the company’s forecast is back-end loaded, and she expected that it was too early in the year for Walgreens to change it.

The Deerfield, Illinois, company’s shares climbed 58 cents to $33.52 in pre-market trading Tuesday.

The price of Walgreens shares tumbled about 28% last year, tripling the decline of the Dow Jones Industrial Average, of which Walgreens is a component. The stock has fallen another 12 percent so far this year.

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