Yesterday, Walgreens Boots Alliance (WBA) has unveiled its Q3 results, revealing a complex financial landscape marked by significant shifts. WBA third quarter sales increased 7.2 percent from the year-ago quarter to $39.0 billion, an increase of 6.9 percent on a constant currency basis, reflecting sales growth in the U.S. Retail Pharmacy and International segments.
Third quarter operating income was $53 million compared to an operating income of $111 million in the year-ago quarter. Third quarter operating income included a non-cash impairment charge related to certain long-lived assets.
Net loss in the third quarter was $175 million, a decrease of $519 million compared to net earnings of $344 million in the year-ago quarter. The decline in net earnings was primarily driven by prior year after-tax gains related to fair value adjustments on variable prepaid forward derivatives and a partial sale of the Company’s equity method investment in Cencora, and higher tax expense in the current quarter.
The U.S. Retail Pharmacy segment had third quarter sales of $30.7 billion, an increase of 7.8 percent from the year-ago quarter. Comparable sales increased 10.3 percent from the year-ago quarter.
Pharmacy sales increased 11.8 percent and comparable pharmacy sales increased 14.6 percent in the quarter, each benefiting from higher branded drug inflation and mix impacts. Comparable 30-day equivalent prescriptions filled in the third quarter increased 2.7 percent from the year-ago quarter, while comparable prescriptions excluding immunizations also increased 2.7 percent. Total 30-day equivalent prescriptions filled in the quarter, including immunizations, increased 0.4 percent to 308 million.
Retail sales decreased 5.3 percent from the year-ago quarter, including the impact of the Footprint Optimization Program and lower comparable retail sales. Comparable retail sales decreased 2.4 percent and were impacted by weaker sales in grocery and household, health and wellness, and beauty.
The International segment had third quarter sales of $6.2 billion, an increase of 7.8 percent from the year-ago quarter, including a favorable currency impact of 1.9 percent. Sales increased 5.9 percent on a constant currency basis, with the Germany wholesale business growing 6.8 percent and Boots UK sales growing 5.0 percent.
Boots UK comparable pharmacy sales increased 5.4 percent on a constant currency basis compared with the year-ago quarter. Boots UK comparable retail sales increased 6.0 percent on a constant currency basis compared to the year-ago quarter. Boots.com sales grew 18.7 percent, or 14.8 percent on a constant currency basis, representing 17 percent of Boots total retail sales.
Adjusted operating income increased 22.0 percent to $214 million, an increase of 20.2 percent on a constant currency basis compared with the year-ago quarter, reflecting strong retail performance in Boots UK and market growth in Germany, partly offset by cost inflation primarily driven by payroll.
