Walgreens beats earnings expectations after omicron-fueled demand for tests and boosters lifted sales

A person enters a Walgreens store in San Francisco, California, U.S., on Tuesday, April 13, 2021.

During the winter months, the omicron variant of Covid-19 increased demand for booster shots and tests, which resulted in Walgreens Boots Alliance's fiscal second-quarter earnings topping analysts' expectations.

The drugstore chain has an outlook for the year. It said that the earnings per share will grow in the low single digits.

The shares fell in premarket trading.

Walgreens reported what analysts were expecting for the second quarter.

• Earnings per share: $1.59 adjusted vs. $1.40 expected
• Revenue: $33.76 billion vs. $33.4 billion expected

Net income fell to $883 million, or $1.02 per share, in the quarter, from $1.03 billion, or $1.19 per share, in the year-ago period.

Excluding items, the company earned more than analysts expected.

Sales rose to $33.76 billion, from $32.78 billion a year earlier, and surpassed the $33.4 billion that analysts expected.

Same-store sales for retail in the U.S. jumped 14.7% in the three-month period compared with the year-ago period, the largest gain in over 20 years. The company said it saw gains in all categories, especially with health and wellness items, including Covid tests, over-the-counter medications for cough, cold and flu and beauty products.

Retail same-store sales at the U.K.-based Boots chain surged 22% year over year, with share gains across all major categories.

Walgreens is trying to become a health-care oriented company. The majority stake of VillageMD was acquired by the retailer, which plans to open hundreds of doctor offices inside of its stores. The company is turning some stores into a Health Corner, where customers can go for a medical consultation with a pharmacist or nurse.

In the second quarter, the drugstore chain administered over 11 million Covid vaccines, bringing its total to over 62.8 million vaccines to date.

The Food and Drug Administration gave the go-ahead this week for a fourth Covid shot for people who are 50 and older.

The future of the U.K.-based Boots drugstore chain is still being considered by Walgreens. Walgreens is exploring strategic options for Boots, including a potential sale, as the company focuses on its U.S. health-care business.

Walgreens shares are down 9% so far this year. The company has a market value of $40.97 billion.

Here is the company's press release.

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