Walgreens Boots Q4 Sales Up, Net Loss Shrinks
Fourth quarter sales at Walgreens Boots Alliance were up more than 9% with the company’s net loss smaller than the comparable quarter the previous year.
Total sales for the quarter ended August 31 were $35.4 billion, up 9.2% year-over-year. Officials with the company said the increase reflects sales growth in the U.S. Retail Pharmacy and International segments, and sales contribution from the U.S. Healthcare segment.
Net loss in the fourth quarter was $180 million compared to a net loss of $415 million in the year-ago quarter, primarily driven by a lower operating loss. Adjusted net earnings decreased 17.1% to $575 million, down 18.1% on a constant currency basis, primarily driven by lower adjusted operating income and a higher adjusted effective tax rate primarily due to timing and release of valuation allowance related to capital loss carryforwards in the year-ago quarter.
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Loss per share was $0.21, compared to a loss per share of $0.48 in the year-ago quarter. Adjusted earnings per share decreased 17% to $0.67, reflecting a decrease of 18% on a constant currency basis.
Year-over-year improvement in operating loss is due to lapping a $783 million non-cash impairment charge related to intangible assets in Boots UK in the year-ago quarter. Adjusted operating income was $683 million, a decrease of 9.8% on a constant currency basis, reflecting lower volumes of COVID-19 vaccinations and testing, and lower levels of sale leaseback contribution, partly offset by improvements in underlying U.S. pharmacy, lower incentive accruals, strong International growth, and improved profitability in U.S. Healthcare.
“Our performance this year has not reflected WBA’s strong assets, brand legacy, or our commitment to our customers and patients,” said Ginger Graham, WBA’s interim CEO. “In just six weeks, we have taken a number of steps to align our cost structure with our business performance, including planned cost reductions of at least $1 billion, and lowered capital expenditures by approximately $600 million. We anticipate seeing the impact of these actions in fiscal 2024, beginning in the second quarter.”
Graham’s tenure as temporary CEO will be ended as the company named Tim Wentworth as its new CEO.
Sales in fiscal 2023 were $139.1 billion, an increase of 4.8% from the year-ago period, reflecting sales growth in the U.S. Retail Pharmacy and International segments, and sales contribution from the U.S. Healthcare segment.
Net loss in fiscal 2023 was $3.1 billion, compared with net earnings of $4.3 billion in the year-ago period. This decrease is driven by a $5.5 billion after-tax charge for opioid-related claims and litigation in the period and lapping of a $2.5 billion after-tax gain on the company's investments in VillageMD and Shields Health Solutions in the year-ago period, partly offset by a $1.7 billion after-tax gain from the partial sale of the Company's investments in Cencora and the complete sale of the Company's investment in Option Care Health.
Loss per share for fiscal 2023 decreased to $3.57, compared with earnings per share of $5.01 in the year-ago period. Adjusted earnings per share was $3.98, a decrease of 20.9 percent on a reported basis and a decrease of 20.3 percent on a constant currency basis.