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Walgreens Takes $700M Hit From Coronavirus ‘Stay At Home’ Orders

Walgreens Boots Alliance said its earnings suffered a negative impact of $700 million to $750 million as the company sustained a major loss of global business from the surge of cases of the coronavirus strain Covid-19 around the world that caused its customers to shelter in their homes.

Early on as the Covid-19 pandemic began in the U.S., WBA and other retailers like CVS Health and Walmart benefitted from Americans and other global customers stocking up on healthcare items and other merchandise with pharmacies among the businesses allowed to stay open.

But as March turned to April and Americans, Europeans and others around the world were sheltering in place into May, Walgreens was hit hard, with retail and pharmacy sales tumbling, particularly in parts of the U.S. and United Kingdom. The adverse sales impact of $700 million to $750 million was almost “entirely from the company’s non-U.S. businesses,” Walgreens said Thursday in its fiscal third quarter earnings report for the period ending May 31, 2020.

“This unprecedented global crisis led to a loss in the quarter as stay-at-home orders affected all of our markets,” Walgreens Executive Vice Chairman and CEO Stefano Pessina, who is also the company’s largest individual shareholder, said Thursday morning. “Covid has impacted all of our markets.”

Walgreens suffered a $1.7 billion loss, or $1.95 per share, compared with earnings of $1.03 billion, or $1.13 per share, a year earlier.

Still, sales increased 0.1% to $34.6 billion, led by retail pharmacy growth in the U.S., which was up 3%, Walgreens said.

“Prescriptions filled in the third quarter decreased 1.3 percent, compared with the same quarter a year earlier,” Walgreens said in its third quarter earnings statement. “ In comparable stores, prescriptions filled increased 0.4 percent from a year earlier, a slower rate of growth than in the second quarter, as COVID-19 stay-at-home orders led to a drop in doctor visits and hospital admissions. The prescription volume trend has shown steady improvement since the end of May. The number of prescriptions filled was 287 million, including immunizations, adjusted to 30-day equivalents.”

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