Walgreens profit plunges on opioid settlement, lower pharmacy sales

[June 30, 2022]  (Reuters) - Drugstore chain Walgreens Boots Alliance Inc posted a 76% fall in quarterly profit on Thursday, hurt by its opioid settlement with Florida and a decrease in U.S. pharmacy sales on waning demand for COVID-19 vaccinations.

People walk by a Walgreens, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York City, U.S., November 26, 2021. REUTERS/Andrew Kelly

Walgreens had been relying on gains from administering COVID-19 vaccines to tide over losses from low prescription volumes and over-the-counter sales of health and wellness products in recent quarters due to the pandemic.

However, after an Omicron-led surge in COVID-19 cases helped boost demand for vaccines and testing demand has tapered off since January.

Walgreens has forecast 30 million COVID vaccinations this year at its sites. In the third quarter, it administered about 4.7 million doses of vaccines and sold 3.9 million tests.

It administered 11.8 million doses of vaccines and sold 6.6 million tests in the preceding quarter.

The company's net income attributable to Walgreens plunged to $289 million, or 33 cents per share, in the third quarter ended May 31, from $1.2 billion, or $1.38 per share, a year earlier.

In May, the U.S. pharmacy chain reached a $683 million settlement with Florida over claims that it had exacerbated the opioid crisis in the state. (https://reut.rs/3nz8Y8t)

(Reporting by Mrinalika Roy and Leroy leo in Bengaluru; Editing by Maju Samuel)

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