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DEERFIELD, Ill. — Walgreens Boots Alliance beat Wall Street's forecast for first quarter sales and earnings.
WBA's adjusted earnings per share of 51 cents for the period ended November 30 topped analysts' consensus projection of 39 cents, while revenue of $39.46 billion surpassed the estimated $37.35 billion.
The company's stock price was up more than 20% early Friday.
"Our first quarter results reflect our disciplined execution against our 2025 priorities: stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models,” said chief executive officer Tim Wentworth. “While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model."
WBA maintained its fiscal 2025 adjusted EPS guidance of $1.40 to $1.80, with growth in the U.S. Healthcare and International segments more than offset by a decline in U.S. Retail Pharmacy, a higher adjusted effective tax rate, and lower contributions from sale-leaseback and Cencora earnings.
First quarter sales increased 7.5 percent from the year-ago period, reflecting sales growth across all business segments.
Bill Schiffner
WBA had an operating loss of $245 million compared to $39 million in the year-ago quarter. Adjusted operating income was $593 million compared to $687 million in the year-ago quarter. The increase in operating loss reflects higher costs related to the Footprint Optimization Program in the U.S. Retail Pharmacy segment, and both operating loss and adjusted operating income reflect lower U.S. retail sales and lapping prior year sale-leaseback gains, partly offset by cost savings initiatives and growth in the U.S. Healthcare segment.
Net loss in the first quarter was $265 million compared to a net loss of $67 million in the year-ago quarter, primarily driven by higher operating loss. Adjusted net earnings decreased 23.0 percent to $440 million, down 23.2 percent on a constant currency basis, reflecting lower adjusted operating income.
The company had a loss per share in the first quarter of 31 cents compared to 8 cents in the year-ago quarter. Adjusted EPS was 51 cents compared to 66 cents in the year-ago quarter reflecting a decrease of 23.4 percent on a constant currency basis.
Net cash used for operating activities was $140 million in the first quarter, a $141 million improvement compared with the year-ago quarter. Operating cash flow was negatively impacted by seasonal inventory build in the U.S., UK and Germany, and legal payments of $137 million. Free cash flow was negative $424 million, a $363 million improvement compared with the year-ago quarter primarily driven by a decrease in capital expenditures of $223 million and higher adjusted operating income excluding sale-leaseback, which does not impact free cash flow.
U.S. Retail Pharmacy
The U.S. Retail Pharmacy segment had first quarter sales of $30.9 billion, an increase of 6.6 percent from the year-ago quarter. Comparable sales increased 8.5 percent from the year-ago quarter.
Pharmacy sales increased 10.4 percent and comparable pharmacy sales increased 12.7 percent in the quarter, each benefiting from higher branded drug inflation and prescription volume. Comparable prescriptions filled in the first quarter increased 2.3 percent from the year-ago quarter while comparable prescriptions excluding immunizations increased 3.5 percent. Total prescriptions filled in the quarter, including immunizations, adjusted to 30-day equivalents increased 1.5 percent to 316.3 million.
Retail sales decreased 6.2 percent and comparable retail sales decreased 4.6 percent compared with the year-ago quarter, reflecting a weaker cough cold flu season and lower sales in discretionary categories.
Adjusted operating income decreased 36.4 percent to $441 million compared to $694 million in the year-ago quarter, driven primarily by lower retail sales and lapping prior year sale-leaseback gains, partially offset by cost savings.
International
The International segment had first quarter sales of $6.4 billion, an increase of 10.2 percent from the year-ago quarter, including a favorable currency impact of 3.6 percent. Sales increased 6.5 percent on a constant currency basis, with the Germany wholesale business growing 11.3 percent and Boots UK sales growing 4.5 percent.
Boots UK comparable pharmacy sales increased 10.9 percent compared with the year-ago quarter. Boots UK comparable retail sales increased 8.1 percent compared to the year-ago quarter with growth across all categories. Boots.com sales grew 30 percent, or 23 percent on a constant currency basis, aided by strong Black Friday performance and representing 22 percent of Boots total retail sales.
Adjusted operating income increased 17.9 percent to $168 million, an increase of 16.1 percent on a constant currency basis compared with the year-ago quarter, led by strong retail performance in Boots UK and growth in Germany, partly offset by cost inflation and technology investments.
U.S. Healthcare
The U.S. Healthcare segment had first quarter sales of $2.2 billion with growth in all businesses compared to the year-ago quarter. VillageMD sales increased 9 percent, CareCentrix increased 16 percent and Shields increased 30 percent.
Operating loss was $325 million compared to $436 million in the prior year period reflecting improved performance at VillageMD and Shields. Adjusted operating income, which excludes certain costs related to stock compensation expense and amortization of acquired intangible assets, was $25 million compared to a loss of $96 million in the year-ago quarter. Adjusted EBITDA of $70 million improved by $109 million versus the prior year quarter reflecting higher contribution from VillageMD risk-based and fee-for-service business and growth at Shields.
