Walgreens buoyed by retail sales growth and emerging consumer health business

Oct 13 (Reuters) – Walgreens Boots Alliance Inc (WBA.O) reported a better-than-expected quarterly profit on Thursday, as growth in U.K. retail sales and a strong new consumer health business helped offset weaker demand for Covid-19 vaccinations. influences.

Shares of Walgreens, one of the largest U.S. pharmacies, rose nearly 7% in premarket trading after the company also forecast higher full-year profits.

Although overall pharmacy sales fell in the fourth quarter due to weaker demand for COVID vaccinations and fewer prescriptions, retail sales in the UK rose 15.2% due to demand for over-the-counter healthcare products.

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Analysts expressed concern about Walgreens’ recent results and cut their forecasts, especially after rival Rite Aid (RAD.N) cut its full-year forecast in September and expressed concern about continued pressure on consumer spending and supply chains.

Evercore ISI analyst Elizabeth Anderson said that despite the mixed results, the full-year forecast was “much better than expected.”

The company also benefited from Walgreens Health, which launched last year as part of Walgreens’ efforts to diversify its business.

The segment provides pharmacy and primary care services in stores, at home or in a doctor’s office through a mobile app. It brought in $622 million in sales in the fourth quarter.

Walgreens said it expects strong growth in its core business through 2023 to offset declining demand for COVID-related products and services.

“Fiscal 2023 will be a year of accelerating core growth and rapidly expanding our U.S. healthcare business,” Chief Executive Rosalind Brewer said in a statement.

The company expects a full-year profit of between $4.45 and $4.65 a share, beating analysts’ expectations of $4.53.

Excluding items, the company earned $0.80 per share in the quarter, compared with a Refinitiv IBES estimate of $0.77.

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Reporting by Mrinalika Roy in Bengaluru; Editing by Maju Samuel

Our Standard: The Thomson Reuters Trust Principles.

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