Retail Pharmacy USA division continues to drive Walgreens’s top line
As we saw in the previous part of this series, Walgreens Boots Alliance’s (WBA) fiscal third-quarter sales increased 14% YoY (year-over-year) to $34.3 billion. Growth was driven by a strong performance of its Retail Pharmacy USA business and the positive impact of currency.
The Retail Pharmacy USA division, which accounted for 75% of third-quarter sales, recorded a 15% YoY increase in revenue to $25.9 billion.
Pharmacy sales increased 19.3% YoY during the quarter, fueled by higher prescription volume from the of Rite Aid acquisition and from the central specialty business. Comparable pharmacy sales remained flat as reimbursement pressure and the generics impact offset the positive effect of brand inflation.
Walgreens’s US retail division, under which the company sells over-the-counter drugs, cosmetics, and other essentials such as toilet paper, continued to witness softness. Same-store sales declined for the eighth consecutive quarter. Comparable retail sales were down 3.8% as the company continued to focus on profitability. However, overall retail sales grew 5% YoY, driven by the sales contribution of the acquired Rite Aid stores.
International division benefits from currency
Walgreens’s Retail Pharmacy International division’s sales increased 6.6% YoY on a reported basis to $3 billion. However, the increase was driven purely by currency benefits, with sales down 2.1% on a constant currency basis. Comparable store sales were in the red once again and declined 1.4% on a constant currency basis during the quarter. There was a deterioration in comparable pharmacy as well as comparable retail sales, which fell 1.7% and 1.3%, respectively, during the quarter.
Revenue for its Pharmaceutical Wholesale division increased 12.6% YoY, driven by the positive impact of currency and comps growth of 4% on a constant currency basis.
Let’s move on to the next section where we’ll look at Walgreens’s margins and profitability.