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Following the publication of its fiscal first-quarter 2025 results, Walgreens Boots Alliance (WBA, Financials) saw its shares climb 14.75% in pre-market trading. Reflecting weaker U.S. retail sales and reduced sale-leaseback gains, revenue grew 7.5% year over year to $39.5 billion while adjusted earnings per share dropped to $0.51 from $0.66.
With a 6.6% rise, the U.S. Retail Pharmacy segment generated $30.9 billion in sales. Increased prescription volumes and branded drug inflation drove 10.4% rise in pharmacy sales. Reflecting a smaller cold and flu season and lower discretionary expenditure, retail sales dropped 6.2%. Adjusted operating income for the segment dropped 36.4% to $441 million.
Strong Black Friday performance by Boots UK and expansion in Germany's wholesale sector helped international sales rise 10.2% to $6.4 billion. Operating income adjusted climbed 17.9% to $168 million.
Driven by double-digit increases in VillageMD, CareCentrix, and Shields, the U.S. Healthcare segment recorded $2.2 billion in sales. Reflecting better performance in risk-based and fee-for- service companies, adjusted EBITDA improved to $70 million from a $39 million loss in the previous year.
Walgreens reported a net loss of $265 million, against $67 million in the same quarter last year, despite the income increases. Higher Footprint Optimization Program related expenses caused operating loss of $245 million to widen.
Expecting healthcare growth to offset declines in retail pharmacy, the company reiterated its fiscal 2025 adjusted EPS target of $1.40 to $1.80.
This article first appeared on GuruFocus.