A person walks past a Walgreens truck owned by Walgreens Boots Alliance, Inc. on November 26, 2021 in Manhattan, New York City, USA.
Andrew Kelly Reuter
walgreens on thursday Reporting the second quarter of the fiscal year Sales beat Wall Street expectations, but adjusted full-year ceiling lowered Earnings forecast The “challenging” retail environment in the U.S. is a contributing factor
The company also posted a significant net loss in the quarter due to significant charges of nearly $6 billion related to the decline in the value of its investments in primary care providers. Village MD. Walgreens is closure VillageMD has been operating dozens of clinics during financial difficulties and believes this business is critical to its continued transformation from a major drugstore chain to a major healthcare company.
The results come as Walgreens’ new CEO, Tim Wentworth, seeks to cut costs and pull the company out of trouble. Walgreens’ stock price fell 30% last year as the company faced weak demand for coronavirus-related products, low pharmacy reimbursement rates, uncertain health care initiatives and a challenging macroeconomic environment.
The company said in a release Thursday that it is confident it will achieve its goal of saving $1 billion in fiscal 2024 through its ongoing cost reduction programs. Walgreens has laid off employees, closed unprofitable stores and used artificial intelligence to streamline its supply chain.
The following compares what Walgreens reported in the quarter to Wall Street expectations, based on analyst research by LSEG (formerly Refinitiv).
- Earnings per share: Adjusted $1.20, forecast 82 cents.
- Revenue: $37.05 billion vs. expected $35.86 billion
Walgreens reduced its fiscal 2024 adjusted earnings outlook to between $3.20 and $3.35 per share. This compares to the company’s previous guidance of $3.20 to $3.50 per share. Analysts surveyed by LSEG expect full-year adjusted earnings of $3.24 per share.
Walgreens said the new guidance reflects the hurdles facing U.S. retailers and the early termination of its sales-leaseback program. It also takes into account the drop in revenue from Walgreens’ pre-selling of its stock in pharmaceutical retailer Sencora (formerly known as Amesaubergen).
The company said strong performance in its Pharmacy Services segment and a lower adjusted effective tax rate helped offset the drag on earnings.
The company did not provide new revenue guidance for the current fiscal year. Walgreens has not provided guidance since October, when it said it expected sales to be between $141 billion and $145 billion.
The company reported a net loss of $5.91 billion, or $6.85 per share, for the quarter. That compares with net income of $703 million, or 81 cents per share, in the same period last year.be
Excluding certain items, including $5.8 billion of non-cash charges related to VillageMD, adjusted earnings per share for the quarter was $1.20.
The company posted revenue of $37.05 billion in the quarter, an increase of about 6% from the same period last year.
Walgreens is experiencing growth in all departments.
The company said the increase reflected sales growth across its three business segments. But Walgreens’ U.S. healthcare division stood out, with second-quarter sales up about 33% year over year.
The segment’s sales were $2.18 billion.
The company said the increase in sales reflected VillageMD’s acquisition of multispecialty healthcare provider Summit Health and growth across all businesses in the segment on a pro forma basis.
VillageMD’s sales increased 20%, particularly due to same-clinic growth. Sales at Seals Health Solutions, the division’s specialty pharmacy company, increased 13% due to new contracts and expansion of current partnerships.
Specialty pharmacies are often designed to provide medicines for patients with complex conditions, such as cancer or rheumatoid arthritis, with unique handling, storage, and distribution requirements.
Walgreens and Village MD
Source: Walgreens
On the other hand, Walgreens US retail pharmacy segment Revenue for the second quarter was $28.86 billion, an increase of approximately 5% from the same period last year.
The division operates more than 8,000 drugstore stores across the United States, selling prescription and nonprescription drugs, as well as health and wellness, beauty, personal care, and food products.
Walgreens said pharmacy sales rose 8.2% in the quarter compared to the same period last year, with comparable sales increasing 8.7% due to higher prices for branded drugs and “strong execution” in pharmacy services.
The total number of prescriptions, including vaccinations, in the quarter was 305.7 million, an increase of more than 2% year-on-year.
Retail sales for the quarter were down 4.5% year-over-year, with comparable retail sales down 4.3%. The company cited a difficult retail environment and a weak respiratory disease season, among other factors.
walgreens international segmentThe company, which operates more than 3,000 retail stores internationally, posted sales of $6.02 billion in the second quarter of its fiscal year. This is an increase of more than 6% compared to the same period last year.
The company said sales at its British subsidiary Boots rose 3%.
