Walgreens Boots Alliance quarterly profits tumbled to $118 million – less than half of what they were a year ago – due to “significantly lower demand for COVID-related services,” the drugstore giant’s chief executive said Tuesday.

Until this year, COVID-19 related sales of vaccines and tests have been a big money maker for drugstore chains like Walgreens as millions of Americans flocked to their local drugstore for tests, vaccines and booster shots in the fight against the Coronavirus. But such sales are slowing dramatically as Americans return to normal life and the public health emergency in the U.S. ended last month after more than three years.

For Walgreens, the loss of COVID-related revenue contributed to profits that fell to $118 million, or 14 cents a share, in the fiscal third quarter ended May 31, from $289 million, or 33 cents a share in the year ago period. “0.8 million COVID-19 vaccinations were administered in the quarter compared to 4.7 million in the year-ago quarter,” Walgreens said in its fiscal third quarter earnings report.

"(Walgreens Boots Alliance) achieved 8.9 percent constant currency sales growth in the third quarter despite a challenging operating environment.” Walgreens chief executive officer Rosalind Brewer said. “Consumers continue to appreciate the value, convenience, and range of services provided by Walgreens and Boots. However, significantly lower demand for COVID-related services, a more cautious and value- driven consumer, and a recently weaker respiratory season created margin pressures in the quarter.”

Given the challenges, Walgreens lowered its earnings per share guidance for the rest of 2023 to “$4.00 to $4.05 from $4.45 to $4.65 previously, reflecting challenging consumer and macroeconomic conditions, and lower COVID-19 vaccine and testing volumes,” the company said.

To maintain growth and improve operations, Walgreens said it is taking “immediate actions” that include another $600 million in cost-cutting. Thus, Walgreens “transformational cost management program” target is now $4.1 billion by fiscal 2024 compared to an earlier goal of $3.5 billion.