Walgreens (WBA) earnings Q2 2024

Walgreens (WBA) earnings Q2 2024

An individual rides previous a Walgreens truck, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York Metropolis, U.S., November 26, 2021. 

Andrew Kelly | Reuters

Walgreens on Thursday reported fiscal second-quarter gross sales that beat Wall Road’s expectations, however lowered the excessive finish of its full-year adjusted earnings outlook partly attributable to a “difficult” retail setting within the U.S.

The corporate additionally posted a steep web loss for the quarter because it recorded a hefty goodwill impairment cost of practically $6 billion associated to its primary-care supplier VillageMD. Walgreens has been closing dozens of VillageMD clinics amid monetary woes and sees the enterprise as important to its ongoing push to rework from a serious drugstore chain to a big health-care firm.

The outcomes come as Walgreens’ new CEO, Tim Wentworth, works to slash prices and steer the corporate out of a tough spot. Shares of Walgreens fell 30% final yr as the corporate confronted weakening demand for Covid merchandise, low pharmacy reimbursement charges, an unsteady push into well being care and a difficult macroeconomic setting. 

In a launch on Thursday, the corporate stated it’s assured it’s going to meet its purpose of saving $1 billion throughout fiscal 2024 by way of its ongoing cost-cutting program. Walgreens has laid off staff, closed unprofitable shops and used synthetic intelligence to make its provide chain extra environment friendly, amongst different efforts.

This is what Walgreens reported for the quarter:

  • Earnings per share: $1.20 adjusted, it was not instantly clear if it in comparison with the 82 cents anticipated by Wall Road, primarily based on a survey of analysts by LSEG
  • Income: $37.05 billion vs. $35.86 billion anticipated

Walgreens narrowed its fiscal 2024 adjusted earnings steerage to $3.20 to $3.35 per share. That compares to the corporate’s earlier outlook of $3.20 to $3.50 per share. Analysts surveyed by LSEG anticipate full-year adjusted earnings of $3.24 per share.

Walgreens stated the brand new steerage displays the hurdles dealing with retailers within the U.S. and an early wind-down of sales-leaseback packages. It additionally takes under consideration decrease earnings attributable to Walgreens’ ahead sale of shares of drug distributor Cencora, previously referred to as AmerisourceBergen.

The corporate stated a stronger efficiency in its pharmacy providers phase and a decrease adjusted efficient tax charge helped to offset the elements dragging on its earnings. 

The corporate didn’t give a brand new income forecast for the fiscal yr. Walgreens has not supplied that steerage since October, when it stated it sees $141 billion to $145 billion in gross sales. 

The corporate reported a web lack of $5.91 billion, or $6.85 per share, for the quarter. That compares with a web earnings of $703 million, or 81 cents per share, for a similar interval a yr in the past. Excluding sure objects, adjusted earnings per share have been $1.20 for the quarter. 

Walgreens stated its fiscal second-quarter outcomes embody a $5.8 billion non-cash goodwill impairment cost associated to VillageMD. 

The corporate booked gross sales of $37.05 billion within the quarter, a roughly 6% bounce from the identical interval a yr in the past. 

Walgreens sees development throughout all divisions

The corporate stated that enhance displays gross sales development throughout its three enterprise segments. However Walgreens’ U.S. health-care division stood out as gross sales jumped about 33% within the fiscal second quarter in comparison with the identical interval a yr in the past. 

Income for the phase got here in at $2.18 billion.

The corporate stated the upper gross sales mirror VillageMD’s acquisition of multi-specialty care supplier Summit Well being and development throughout all companies within the phase on a pro-forma foundation.

VillageMD gross sales grew 20% attributable to same-clinic development, amongst different elements. Gross sales from the phase’s specialty pharmacy firm, Shields Well being Options, grew 13%, attributable to new contracts and expansions of present partnerships.

Specialty pharmacies are designed to ship medicines with distinctive dealing with, storage and distribution necessities, typically for sufferers with complicated circumstances akin to most cancers and rheumatoid arthritis.

Walgreens and VillageMD

Supply: Walgreens

In the meantime, Walgreens’ U.S. retail pharmacy phase generated $28.86 billion in gross sales within the fiscal second quarter, a rise of virtually 5% from the identical interval final yr.

That phase operates greater than 8,000 drugstores throughout the U.S., which promote prescription and nonprescription medicine in addition to well being and wellness, magnificence, private care, and meals merchandise. 

Walgreens stated pharmacy gross sales for the quarter rose 8.2% in contrast with the year-ago quarter, as comparable gross sales climbed 8.7% attributable to value inflation in model medicines and “robust execution” in pharmacy providers. 

Complete prescriptions stuffed within the quarter together with immunizations totaled 305.7 million, a greater than 2% enhance from the identical interval a yr in the past. 

Retail gross sales for the quarter fell 4.5% from the prior-year quarter, and comparable retail gross sales declined 4.3%. The corporate pointed to a difficult retail setting and a weaker respiratory season, amongst different elements. 

Walgreens’ worldwide phase, which operates greater than 3,000 retail shops overseas, posted $6.02 billion in gross sales within the fiscal second quarter. That is a rise of greater than 6% from the year-ago interval. 

The corporate stated gross sales from its U.Okay. subsidiary, Boots, grew 3%.

Unique information supply Credit score: www.cnbc.com

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