COVID-19 vaccinations, testing demand fuel Walgreens forecast raise By Reuters

© Reuters. FILE PHOTO: A person rides past a Walgreens truck, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York City, U.S., November 26, 2021. REUTERS/Andrew Kelly

(Reuters) -Walgreens Boots Alliance Inc raised its full-year adjusted profit growth forecast and beat first-quarter earnings estimates on Thursday, as the U.S. pharmacy major benefits from strong demand for COVID-19 vaccinations and testing.

Shares of the Deerfield, Illinois-based company rose 3.2% to $55.75 in trading before the bell.

Walgreens administered 15.6 million COVID-19 vaccinations and 6.5 million tests in the quarter ended Nov. 30, helping U.S. same-store retail sales jump 10.6% – the highest in over 20 years. To date, the company said it had administered over 56 million vaccines.

Governments and health authorities around the world are pushing for increased vaccinations and testing as the fast-spreading Omicron coronavirus variant threatens to disrupt industries and overburden healthcare systems.

Walgreens increased its full-year adjusted profit expectations to low-single digit growth, from flat previously.

Same-store sales at its Boots UK retail stores increased 16.3% in the quarter, as the business rebounds from a hit during the early stages of the pandemic.

Meanwhile, the company reported sales of $51 million in its newly created business unit Walgreens Health.

Like rival CVS Health Corp (NYSE:), Walgreens is diversifying its services beyond drugstores as deep-pocketed rivals such as Inc (NASDAQ:) seek to expand beyond online pharmacy business.

As part of the push, Walgreens in October said it would make a $5.2 billion investment in primary care provider VillageMD and $330 million in post-acute and home care provider CareCentrix.

It also closed a roughly $970 million investment in October to acquire a majority stake in Shields Health Solutions to bolster its specialty pharmacy business.

Excluding items, Walgreens earned $1.68 per share, compared with Refinitiv IBES estimates of $1.33.

Revenue rose 7.8% to $33.9 billion, beating analysts’ estimate of $32.74 billion.

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