11 months ago • 2 mins
Walgreens Boots Alliance reported impressive results on Thursday, but its share price looked less than healthy.
What does this mean?
It's been an interesting quarter for Walgreens Boots Alliance. With stateside Covid cases disappearing into the rear-view mirror, the drugstore giant couldn’t rely on vaccines and home testing kits to pass muster anymore. Then fate intervened, sending one of the worst flu seasons in recent memory, and giving demand for over-the-counter cough and cold medicines a big, (un)healthy boost. Walgreen’s British business Boots pulled its weight across the pond too, ramping up its market share for the seventh quarter running. Add in a jump to beauty and personal care sales (probably thanks to the lipstick effect), and the firm coasted past expectations for revenue and profit – putting a bright, lipsticked smile on bosses’ faces.
Why should I care?
For markets: Walgreens’ makeover.
Walgreens is trying to transform itself into a full-blown healthcare company, and it’s already put a ton of money on the line. The firm recently added specialty pharmacy company Shields Health Solutions and home care platform CareCentrix to its brimming shopping basket. But the firm's healthcare segment sales missed expectations last quarter, and the slew of acquisitions wasn’t enough to make Walgreens brighten the year’s profit outlook. That could be why shares dropped, despite the impressive headline figures – or maybe, just maybe, that was down to the $5.2 billion opioid litigation charge Walgreens took in the quarter…
Zooming out: Golden oldies.
Healthcare is a hot ticket, especially with the economy taking a hit: we’re always going to need healthcare, after all, especially with an aging population. That might be part of the reason GE Healthcare saw a strapping 8% bump on its trading debut earlier this week, as part of its spinoff from the GE conglomerate. The plucky firm even mentioned it’s on the lookout for some small-fry acquisitions of its own this year.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
/3 • Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.