Walgreens Boots Alliance Reports Fiscal 2025 Third Quarter Results with $0.38 Adj. EPS

Walgreens Boots Alliance, Inc. (NASDAQ: WBA) released its fiscal 2025 third-quarter results, revealing a mixed performance amid ongoing challenges and strategic shifts. The company’s financials showed a decline in adjusted earnings per share, yet an increase in sales, reflecting the complexity of the current business landscape.

WBA Reports Better-than-Expected Results for Third-Quarter

The third quarter of fiscal 2025 presented a challenging landscape for Walgreens Boots Alliance, Inc. as the company reported a loss per share of $0.20, a stark contrast to the earnings per share of $0.40 in the same quarter last year.

This decline was primarily attributed to the absence of prior year gains related to fair value adjustments and a partial sale of the company’s equity method investment in Cencora. Additionally, a higher tax expense in the current quarter further impacted the results. Despite these setbacks, the adjusted earnings per share stood at $0.38, slightly above the market expectation of $0.34, signaling some positive aspects in the company’s operations.

Sales for the quarter increased by 7.2% year-over-year to $39.0 billion, surpassing the anticipated $36.6 billion. This growth was driven by the U.S. Retail Pharmacy and International segments, with the former seeing a sales increase of 7.8% to $30.7 billion. However, the U.S. retail front-end sales remained weaker, reflecting ongoing challenges in consumer spending and retail dynamics. The company’s operating income for the quarter was $53 million, down from $111 million in the prior year, influenced by a non-cash impairment charge related to certain long-lived assets.

The U.S. Healthcare segment showed signs of improvement, with operating losses narrowing from $220 million to $64 million, showcasing the benefits of cost savings initiatives. However, the segment experienced a slight decline in sales, primarily due to lower revenue from VillageMD. Overall, the quarter’s results highlight the company’s efforts to balance cost savings with strategic investments in a rapidly evolving industry.

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WBA Fiscal 2025 Guidance and Strategic Outlook

Looking ahead, Walgreens Boots Alliance has withdrawn its fiscal 2025 guidance due to the pending acquisition by entities affiliated with Sycamore Partners.

This strategic move is expected to close in the latter half of the calendar year 2025, subject to regulatory and shareholder approvals. As a result, the company has opted not to host a conference call or provide detailed financial guidance for the remainder of the fiscal year, aligning with customary practices during such transactions.

The acquisition is poised to transition Walgreens Boots Alliance into a private entity, removing its stock from the Nasdaq Stock Market. This strategic shift underscores the company’s focus on navigating the complexities of the retail and pharmacy landscape, while managing its cash flow and investments for long-term growth. CEO Tim Wentworth emphasized the importance of a disciplined approach to managing future cash needs, particularly in light of the evolving pharmacy and retail environment.

Despite the absence of detailed guidance, the company’s strategic priorities remain centered on cost savings and growth initiatives, particularly within the U.S. Retail Pharmacy segment. The focus on addressing reimbursement models, enhancing monetization efforts, and expanding the U.S. Healthcare segment are key pillars of its strategic outlook.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.