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Shares of Walgreens, one of the largest U.S. pharmacies, rose nearly 7% in premarket trading after the company forecast a higher full-year profit.
Walgreens launched Walgreens Health last year as part of its efforts to diversify its business.
The unit provides pharmacy and primary care services in stores, at home or a doctor’s office and via mobile app. It brought in sales of $622 million in the fourth quarter.
For 2023, Walgreens said its expects strong growth in its core business to offset waning demand for COVID related products and services.
“Fiscal 2023 will be a year of accelerating core growth and rapidly scaling our U.S. Healthcare business,” Chief Executive Officer Rosalind Brewer said in a statement.
The company expects full-year profit in the range of $4.45 to $4.65 per share, the top end of which came above analysts’ expectations of $4.53.
Arun Sundaram, senior equity analyst at CFRA Research, said Wall Street expectations for Walgreens 2023 guidance had “come down meaningfully” especially after rival Rite Aid (NYSE:RAD) cut its full-year forecast in September and flagged concerns of sustained pressure on consumer spending and supply chain challenges.
Excluding items, the company earned $0.80 per share in the fourth quarter, compared with Refinitiv IBES estimates of $0.77.
