How Walgreens’s International Businesses Performed in 1Q18



Retail Pharmacy International

In this part of our series, we’ll discuss the performance of Walgreens Boots Alliance’s (WBA) Retail Pharmacy International and Pharmaceutical Wholesale businesses in 1Q18.

Retail Pharmacy International sales increased 4.1% YoY (year-over-year) to $3.1 billion in 1Q18. The division recorded a sales increase after six consecutive quarters of decline. However, the improvement was largely driven by positive currency adjustments. On a constant-currency basis, sales fell 0.8% YoY during the quarter.

Comparable-store sales fell 0.7% on a constant-currency basis. While comparable pharmacy sales declined 0.1% during the quarter, comparable retail sales recorded a greater decline of about 1%.

Adjusted gross profit (in constant currency) for the division fell 0.8% to $1.2 billion as margins fell at both the retail and pharmacy divisions.

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Pharmaceutical Wholesale

Pharmaceutical Wholesale sales increased 5.6% YoY to $5.7 billion. Comparable sales were up 4.5% on a constant-currency basis. Management said the gain fell short of low its market-growth estimate.

“This was behind our estimate of market growth weighted on the basis of our country wholesale sales due to challenging market conditions in certain Continental European countries, partially offset by strong performance in emerging markets,” said George Fairweather, CFO of Walgreens.

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

Read on to the next section to read about Walgreens’ 1Q18 margins and profitability.


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