On January 10, 2025, Walgreens Boots Alliance Inc (WBA, Financial) released its 8-K filing detailing the financial results for the first quarter of fiscal 2025, which ended on November 30, 2024. The company reported a significant increase in sales but faced challenges with increased losses. Walgreens Boots Alliance, a leading retail pharmacy chain in the U.S., operates over 8,000 locations, with a substantial portion of its revenue derived from prescription drug sales. The company is also expanding its healthcare services to create an omnichannel experience for patients.
Financial Performance and Challenges
Walgreens Boots Alliance Inc (WBA, Financial) reported a first-quarter loss per share of $0.31, a decline from a loss per share of $0.08 in the same quarter last year. The adjusted earnings per share (EPS) stood at $0.51, down from $0.66 in the previous year, reflecting a 23.4% decrease on a constant currency basis. The company's performance was impacted by lower U.S. retail sales and the absence of prior year sale-leaseback gains, although these were partially offset by cost savings and growth in the U.S. Healthcare segment.
Sales Growth and Segment Performance
First-quarter sales increased by 7.5% year-over-year to $39.5 billion, with a 6.9% increase on a constant currency basis. This growth was driven by all business segments, particularly the U.S. Retail Pharmacy, which saw a 6.6% increase in sales to $30.9 billion. Pharmacy sales within this segment rose by 10.4%, benefiting from higher branded drug inflation and increased prescription volume. However, retail sales decreased by 6.2%, reflecting a weaker cough, cold, and flu season and lower sales in discretionary categories.
International and U.S. Healthcare Segments
The International segment reported a 10.2% increase in sales to $6.4 billion, aided by a favorable currency impact and strong performance in Germany and the UK. The U.S. Healthcare segment achieved sales of $2.2 billion, with notable growth in VillageMD, CareCentrix, and Shields. The segment's operating loss improved to $325 million from $436 million in the prior year, reflecting better performance at VillageMD and Shields.
Financial Metrics and Cash Flow
Walgreens Boots Alliance Inc (WBA, Financial) reported an operating loss of $245 million, compared to $39 million in the previous year. The adjusted operating income was $593 million, down from $687 million. The net loss for the quarter was $265 million, compared to $67 million in the prior year. Despite these challenges, the company improved its net cash used for operating activities by $141 million, resulting in a negative free cash flow of $424 million, a $363 million improvement from the previous year.
Strategic Outlook and Commentary
“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 Tim Wentworth, Chief Executive Officer, Walgreens Boots Alliance.
Walgreens Boots Alliance Inc (WBA, Financial) remains committed to its strategic priorities, including stabilizing its retail pharmacy operations and expanding its healthcare services. The company maintains its fiscal 2025 adjusted EPS guidance of $1.40 to $1.80, anticipating growth in U.S. Healthcare and International segments to offset declines in U.S. Retail Pharmacy.
Explore the complete 8-K earnings release (here) from Walgreens Boots Alliance Inc for further details.
