Walgreens Reports Stronger Profit as Covid-19 Vaccine Rollout Ramps Up -- Update
By Sharon Terlep and Micah Maidenberg
Walgreens Boots Alliance Inc. says money made from administering
Covid-19 vaccines should begin to offset pandemic-related losses as
more people get shots and the U.S. government pays a higher
The company said Wednesday it has administered more than eight
million vaccines to date, including four million in March.
Executives now expect the company to administer 26 million to 34
million shots during its fiscal year, which ends Aug. 31. The
higher number in part led the company to lift its profit
Covid so far has hurt Walgreens more than it has helped, the
Store sales are down amid pandemic-related lockdowns,
prescription volumes dropped as people put off medical care, and
sales of cold-and-flu products tanked as Covid precautions
prevented many people from getting sick from other bugs. Meantime,
the company is spending more to keep workers and customers safe and
The U.S. Centers for Medicare and Medicaid Services announced
earlier this month that it would increase the payment rate for
vaccines to $40 for each dose, up from $28 for a single dose and
$45 for two doses.
The U.S. said the increase, "reflects new information about the
costs involved in administering the vaccine for different types of
providers and suppliers, and the additional resources necessary to
ensure the vaccine is administered safely and appropriately."
It isn't clear if all insurers will match the government's $40
rate, Walgreens Finance Chief James Kehoe said, though the
company's increased profit forecast is based on that reimbursement
The company reported a stronger profit for its latest quarter, a
performance that comes as it looks to make itself a cornerstone in
the distribution of Covid-19 vaccines under new Chief Executive
Vaccinations have been ramping up around the country, with
states expanding eligibility to more adults. Rivals including CVS
Health Corp., as well as supermarket chain Kroger Co. and Walmart
Inc., are also pushing to get consumers to visit their locations to
"Our team will move swiftly and decisively to best serve the
needs of our patients, customers and communities around the world,
at this critical time and beyond," said Ms. Brewer, who took the
helm at Walgreens earlier in March.
Walgreens on Wednesday reported $32.8 billion in sales from
continuing operations for its quarter that ended Feb. 28, up almost
5% from the year-earlier period.
Comparable sales in the U.S. were up 2%, including a 4.5% gain
in pharmacy items. Demand for other retail products was lower, amid
a weaker cough, cold and flu season, the company said.
Profit rose to $1.03 billion, or $1.19 a share, from $946
million, or $1.07 a share, for the year-earlier period. After
adjustments, Walgreens reported earnings of $1.40 a share, ahead of
what analysts expected for that metric.
In January, the company said it had hired Ms. Brewer to serve as
CEO. She took over the top role from Stefano Pessina, who now is
executive chairman of its board. Ms. Brewer is a former CEO of
Sam's Club and chief operating officer at Starbucks Corp.
Walgreens shares were up more than 6% in morning trading.
Write to Sharon Terlep at firstname.lastname@example.org and Micah
Maidenberg at email@example.com
(END) Dow Jones Newswires
March 31, 2021 11:47 ET (15:47 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.