Walgreens beats third-quarter expectations
Walgreens Boots Alliance (WBA) reported its results for its third fiscal quarter, which ended on May 31, before the bell this morning. The pharmacy giant outperformed both top- and bottom-line expectations.
Total sales increased 14% YoY (year-over-year) to $34.33 billion, beating Thomson Reuters I/B/E/S Estimates by $280 million. Adjusted earnings per share expanded 15% YoY to $1.53, five cents below forecasts.
“I am pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow,” said Stefano Pessina, executive vice chairman and CEO.
Management also raised the lower end of its full-year earnings guidance by 5 cents per share. It now expects adjusted diluted earnings per share to range between $5.90 and $6.05 during fiscal 2018.
Management also said it plans to repurchase up to $10 billion of its shares and raise dividends by 10% to 44 cents.
Key sales drivers
The Retail Pharmacy USA division, which accounted for 75% of third-quarter sales, recorded a 15% increase in revenue to $25.9 billion.
Pharmacy sales increased 19.3% year-over-year during the quarter, fueled by higher prescription volume from the of Rite Aid acquisition and central specialty business. Comparable pharmacy sales remained flat as reimbursement pressure and generics offset the positive effect of brand inflation.
Walgreens’s US retail division, where the company sells over-the-counter drugs, cosmetics, and other essentials like toilet paper, continued to see softness. Same-store sales declined for the eighth straight quarter. Comparable retail sales were down 3.8%, as the company continued to focus on profitability.
Retail Pharmacy International sales increased 6.6%. However, the increase was driven by the positive impact of currency. Sales were down 2.1% on a constant-currency basis.
Pharmaceutical Wholesale revenue increased 12.6% YoY, driven by the positive impact of currency and comps growth (on a constant-currency basis) of 4%.