In a strange twist, Walgreens Boots Alliance (NASDAQ: WBA) has announced a weaker-than-expected quarter – because of COVID-19.

Walgreens said its fiscal third-quarter earnings came in at $0.83 per share. That’s down 43.5% from the year-earlier period, and well below the consensus estimate of $1.18 per share.

The Walgreens news was unexpected. As a pharmacy, most Walgreens stores have remained open during the pandemic. Despite that, consumer shopping patterns have changed.

Instead of popping into their local Walgreens to pick up basic groceries or other necessities like school supplies between trips to the grocery store, consumers are increasingly ordering online or simply foregoing to purchases.

Interestingly enough, Walgreens and other drug stores are much like gas stations. You’d think selling gasoline would be a gas station’s main business, but margins on gasoline sales are actually quite tight. Gas stations make more when you pop in to buy a soda, a sandwich or a cup of coffee while you’re filling up.

Pharmacies are no different. Drug prices are negotiated with distributors and margins on drug sales are pretty tight. Pharmacies like Walgreens make more profit when you pick up other goods than when you fill a prescription.

Who would have thought pharmacies would struggle during a pandemic?

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The Big News . . .

PPE Is In Short Supply . . . Again

COVID-19 cases are spiking again in Texas, one of the hardest hit states. That has strained supplies of personal protective equipment (PPE) across the states. Doctors and nurses at major medical centers in Houston have been told to use N95 respirator masks for up to 15 days before throwing them out. That lack of PPE is also forcing dentists in some parts of the state to cancel all but the most urgent procedures.

Say Goodbye to College Football

Dozens of colleges and universities have said they’re cancelling sports programs for the upcoming semester because COVID-19. The Ivy League has said they’re cancelling sports programs for the time being, as well as the University of Massachusetts, Morehouse College and the Centennial Conference. More programs are expected to be cut, meaning there won’t be much in the way of college sports this season.

The Layoffs Keep Coming

While the employment situation has shown some signs of improving, layoffs keep coming. United Airlines (NASDAQ: UAL) has warned it could furlough as many as 36,000 employees this fall if the pandemic drags on. Even Levi Strauss & Co. (NYSE: LEVI) has said it will cut 15% of its corporate workforce, about 700 jobs, because of lost sales.

The Coronavirus Numbers

Here are the numbers from Thursday at 8:21 a.m. EST:

12,198,686 Infected worldwide
552,791 Global deaths
3,159,671 Infected in the U.S.
134,888 Deaths in the U.S.

What’s Next?

The Walgreens experience has been yet another example of unexpected effects of a global pandemic.

This is why investors must focus on businesses that have and continue to adapt to changing market conditions.

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Yours in Health & Wealth,

Ben Shepherd