It has taken three and a half years, but the pandemic’s impact on earnings is finally passing into history. Domino’s Pizza (DPZ.N), Walgreens Boots Alliance (WBA.O) and Delta Air Lines (DAL.N) – all of which saw big swings in their revenue and profit as a result of Covid-19 – reported on Thursday that life is returning to something like normal, for better or for worse.
At Domino’s, it’s worse. Revenue at the pizza delivery company was down about 4% from the same period last year, as restaurants in the U.S. sold less. Walgreens, meanwhile, lost $180 million in the quarter, while citing significantly lower revenue from Covid tests and vaccines. Both stocks soared during the pandemic. Now, trading at 23 times and 6 times forward earnings respectively according to LSEG data, both are valued at lower multiples of profit than they were at the end of 2019.
The time when yearly comparisons come with Covid distortions is petering out. Vaccinations were already down sharply at Walgreens by the end of 2022, so the next quarter may look relatively stable. Air passengers last December were only 4% below 2019’s levels, according to government data. While there’s no room for complacency about future shocks, third-quarter earnings might provide a bookend to a strange, turbulent time. (Robert Cyran)
Follow @Breakingviews on X
Capital Calls – More concise insights on global finance:
Ericsson $3 bln hit ticks most boxes for M&A folly read more
Birkenstock IPO gets predictable shoeing read more
LVMH may have to settle for a more humdrum future read more
Qantas overhaul gets stuck on tarmac read more
Schaeffler auto deal has multiple value drivers read more
