Walgreens: Strong US Pharmacy Sales

Walgreens’ (WBA) Retail Pharmacy USA division includes the company’s retail and pharmacy operations in the US. It accounted for ~74% of Walgreens’ 4Q17 top line.

The segment’s revenues have risen 7.5% YoY (year-over-year) to $22.3 billion, while the sales comps rose 3.1% during the quarter. Pharmacy sales have risen 12.6% YoY. The company’s total prescriptions filled have risen 9% YoY to 250.2 million. Most of the increase came from prescriptions filled at AllianceRx Walgreens Prime—the venture that Walgreens formed with Prime Therapeutics to handle mail orders and specialty prescriptions.

However, the US retail business continued to deteriorate. The sales have fallen 3.9% YoY due to the closure of its e-commerce operations and a 2.1% fall in retail comps.

Retail Pharmacy International sales fell for the sixth consecutive quarter. The sales have fallen 3.2% YoY to $2.9 billion. However, the deterioration was largely due to currency headwinds. Excluding the currency’s negative impact, the sales fell 0.4% during the quarter.

While the comparable pharmacy sales rose 0.5% on a constant currency basis, the comparable retail sales retail sales fell 0.5%.

Pharmaceutical Wholesale sales rose 0.8% to $5.4 billion. Ignoring FX headwinds, the division’s sales rose 5.4% from 4Q17. While the emerging markets and the United Kingdom remained strong, continental Europe continued to face challenging market conditions.

ETF investors seeking to add exposure to Walgreens could consider the iShares US Consumer Services ETF (IYC). IYC invests 2% of its portfolio in Walgreens.