Walgreens Boots Alliance cut its profit forecast for the year as the pharmacy chain continued to face "significantly lower" demand for COVID tests and vaccines.
During the three-month period ending in June, the company administered fewer than 1 million COVID shots, a huge drop-off from the 4.7 million that were administered the same time a year ago.
Meanwhile, Walgreens administered 2.4 million vaccines during the quarter, a decline from the 11.8 million vaccines administrated during the same period a year ago.
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The lower demand for COVID-related services coupled with "a more cautious and value-driven consumer, and a recently weaker respiratory season created margin pressures in the quarter," CEO Rosalind Brewer said in a statement.
Brewer said the company's revised guidance is an "appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year."
Shares of the pharmacy chain tumbled on the news.
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During the third quarter, the company reported that sales in U.S. retail stores that were open for at least a year slipped 0.2%, which included a "headwind from lower levels of OTC [over the counter] test kits.
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Adjusted operating income decreased $4 million to $1 billion from the year-ago quarter, which reflected a 22% headwind from lower COVID-19 vaccination and testing volumes as well as continued reimbursement pressure and increased labor costs.
Walgreens now expects fiscal 2023 earnings per share of $4.00 to $4.05, down from $4.45 to $4.65.
