Walgreens shares give up gains after company warns of rising labor costs to keep up with Covid vaccines and tests

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A sign displays the types of COVID-19 vaccination doses available at a Walgreens mobile bus clinic on June 25, 2021 in Los Angeles, California.
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Walgreens Boots Alliance on Thursday exceeded analysts’ expectations for the fiscal first-quarter and raised its forecast for the year, as customers came to its stores for Covid vaccines and testing.

Shares rose more than 3% in premarket trading.

The drugstore chain raised its forecast for the year, saying it now anticipates adjusted earnings per share to grow the low single-digits instead of being flat.

Here’s what Walgreens reported compared with what analysts were expecting for the first quarter ended Nov. 30, based on Refinitiv data:

  • Earnings per share: $1.68 adjusted vs. $1.33 expected
  • Revenue: $33.90 billion vs. $32.74 billion expected

In the quarter, net income rose to $3.58 billion, or $4.13 per share, from a net loss of $308 million, or 36 cents per share, a year earlier.

Excluding items, the company earned $1.68 per share, topping the $1.33 expected by analysts surveyed by Refinitiv.

Sales rose to $33.90 billion from $31.44 billion a year earlier, and were higher than the $32.74 billion that analysts expected.

Walgreens said it administered 15.6 million Covid vaccines in the latest quarter — bringing its total to more than 56 million to date. Its pace of vaccinations accelerated from the previous quarter, when it gave 13.5 million shots. Covid vaccinations peaked at Walgreens in the third quarter of last year, when it administered 17 million shots.

Sales gained steam in the quarter, too, with U.S. retail same-store sales rising 10.6% compared with the year-ago period. Same-store sales at its Boots business in the United Kingdom rose by 16.3% versus a year ago.

Walgreens shares closed Wednesday at $54.00, up nearly 1%. The company’s shares have risen 31% over the past 12 months, bringing its market value to $46.74 billion.

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