© Archyde.com. FILE PHOTO: Signage is seen outside of a Walgreens, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York City, U.S., November 26, 2021. REUTERS/Andrew Kelly
(This March 28 story has been corrected to say that the increase in wages to $15 was not for pharmacists, in paragraph 2)
By Khushi Mandowara and Leroy Leo
(Archyde.com) – Walgreens Boots Alliance (NASDAQ:) Inc said on Tuesday it does not plan to increase wages further, as a shortage of pharmacists eases following the company doubled down on hiring and pay raises last year.
A labor shortage during the pandemic prompted Walgreens and other U.S. drugstore operators, including CVS Health Corp (NYSE:) and Walmart (NYSE:) Inc, to raise minimum wages to $15 per hour.
Walgreens has also lost market share to its rivals following closing several stores during the pandemic, and is aiming to regain it by the end of fiscal year 2023 by reducing pay gap and increasing automation at fulfillment centers.
“We also made the investment to regaining the pharmacy talent in our stores. And it’s working for us,” CEO Rosalind Brewer said in an investor call.
The company’s U.S. retail pharmacy, its core operation, recorded revenue of $27.6 billion in the second quarter ended February, surpassing analysts’ estimates of $26.8 billion, as higher prescription drug prices helped soften the blow from declining COVID-19 vaccinations. Same-store pharmacy sales rose 4.9%.
Shares of the company rose 4.3% to $34.37 in midday trading.
Walgreens, one of the largest U.S. pharmacies, has been looking to expand beyond its core business, with acquisitions of healthcare service operators VillageMD and urgent care provider Summit Health.
The health segment saw a sharp increase in revenue to $1.6 billion, driven by the deals.
Excluding one-off items, the company reported earnings of $1.16 per share for the quarter, higher than the average analyst estimate of $1.10, according to Refinitiv data.