Despite an earnings decline, Walgreens beat a Wall Street estimate in the fourth quarter and posted positive retail comparable sales.
For the fourth quarter, Walgreens posted net earnings of $373 million, or 43 cents per diluted share, versus $677 million, or 75 cents per diluted share, in the year-previous period.
Adjusted company net earnings were $887 million, or $1.02 per share, versus $1.28 billion, or $1.43 per share, in the year-earlier quarter. Adjusted company net earnings per share beat a Zacks Investment Research analyst consensus estimate of 96 cents.
Walgreens maintained that the decreases in net earnings and adjusted net earnings primarily resulted from an estimated adverse COVID-19 impact of 46 cents, lower U.S. pharmacy gross profit and year-on-year bonus changes, partially offset by transformational cost management program savings.
Net sales were $34.75 billion versus $33.95 billion in the year-previous quarter. Operating income was $650 million versus $878 million in the year-before period.
Retail Pharmacy USA sales increased 3.6% in the fourth quarter to $27 billion as comparable sales gained 3.6% versus the quarter a year past. Comparable retail sales advanced 4.7%, boosted by 15% growth in the health and wellness category and 8% growth in the personal care category in the period year over year, partly offset by a 3% decrease in the beauty segment.
For the full fiscal year, net earnings were $456 million, or 52 cents per share, versus $3.98 billion, or $4.31 per diluted share, in the period a year prior. Adjusted company net earnings were $4.18 billion, or $4.74 per share, versus $5.53 billion, or $5.99 per share, in the quarter a year earlier.
Walgreens stated that the earnings decline primarily resulted from a third quarter non-cash impairment charges and costs related to the transformational cost management program.
Net sales were $139.54 billion versus $136.87 billion in the quarter a year previous. Operating income was $1.31 billion versus $5 billion in the period a year before.
Stefano Pessina, executive vice chairman and CEO of Walgreens, said, “I am pleased to report results that came in at the high end of our expectations as we continue to adapt and transform our business model to changing customer needs. Despite uncertainty amid the global COVID-19 pandemic, we are seeing gradual improvement in key U.S. and U.K. markets and continued strong performance in our wholesale business. I’m also encouraged by the accelerating growth in our e-commerce platforms. Now, more than ever, our pharmacy-centered business is at the heart of community healthcare, and we are expanding on that role for the future.”