Walgreens Boots Alliance (WBA) Q1 earnings 2023

Walgreens Boots Alliance Friday reported first quarter fiscal earnings beat Wall Street estimates Friday after the early flu season boosted demand for cough and cold medicine.

The company said it also raised its full-year revenue outlook due to the acquisition of the US healthcare segment of Summit Health. However, for the most recent quarter, the segment’s revenue fell short of expectations.

Here’s how Walgreens did in the first fiscal quarter compared to what Wall Street had anticipated, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.16, adjusted, vs $1.14 expected
• Revenue: $33.38 billion vs $32.84 billion expected

Despite strong sales, Walgreens swung to an unadjusted loss of $3.7 billion, or $4.31 per share, for the three-month period ended Nov. 30, compared with net income of $3.58 billion, or $4.13 per share. previous year.

The losses were fueled by a $5.2 billion settlement Walgreens was ordered to pay in opioid-related lawsuits after several states alleged the company mishandled prescriptions and should have known they were prescribing the drug too often.

Thanks to an early flu season and strong demand for cough and cold medicine, sales rose to $33.38 billion, down slightly from $33.9 billion a year earlier. The company also saw sales of beauty and personal care, which helped offset losses from demand for Covid vaccines and home testing kits, which drove profits in the previous quarter.

Over the past five quarters, Walgreens has beaten Wall Street expectations as the ubiquitous drugstore chain continues to transform from a pharmacy-led retailer to a broader health care company.

While the company has made significant investments to achieve its vision, sales from the US healthcare segment fell short of expectations at $989 million but were still up from the prior-year period.

The company is in the process of acquiring CareCentrix, which coordinates home care for patients after discharge from the hospital, and Shields Health Solutions, a specialty pharmaceutical company.

This is on top of a $5.2 billion deal that has been struck with primary care provider VillageMD, which has opened a total of 393 clinic locations near Walgreens stores.

Since the end of last quarter, an additional 59 VillageMD clinics have opened and the program will continue to grow after the provider announced plans to acquire urgent care provider Summit Health-CityMD for $8.9 billion.

The acquisition prompted Walgreens to increase its full-year sales guidance to $133.5 billion to $137.5 billion.

Following the Summit Health acquisition announcement in November, Walgreens raised its U.S. Healthcare target to $14.5 billion to $16 billion for fiscal year 2025, from a previous target of $11 billion to $12 billion.

The company also maintained its full-year earnings range of $4.45 to $4.65, compared to estimates of $4.50.

The earnings release came after Walgreens confirmed it would become one of the pharmacy chains to offer the abortion pill mifepristone after the FDA ruled it could be sold in drugstores.

“We intend to become a certified pharmacy under the program,” the company told CNBC on Wednesday.

“We are working on registration, the training required of pharmacists, as well as evaluating the pharmacy network about where we usually release products that have extra FDA requirements and will provide this consistent with federal and state laws.”

Read the company’s earnings release here.

CNBC’s Bertha Coombs contributed to this report.