Workflow
Walgreens Boots Alliance(WBA) - 2025 Q2 - Quarterly Report
WBAWalgreens Boots Alliance(WBA)2025-04-08 11:07

Sales Performance - Sales for the three months ended February 28, 2025 increased 0.6 percent to 6.1billion,witha4.1percentincreaseonaconstantcurrencybasis[263].−SalesforthesixmonthsendedFebruary28,2025increased5.3percentto6.1 billion, with a 4.1 percent increase on a constant currency basis [263]. - Sales for the six months ended February 28, 2025 increased 5.3 percent to 12.5 billion, with a 5.3 percent increase on a constant currency basis [272]. - Pharmacy sales decreased 6.7 percent in the three months ended February 28, 2025, with comparable pharmacy sales in constant currency increasing 3.6 percent [264]. - Pharmacy sales decreased 4.1 percent in the six months ended February 28, 2025, with comparable pharmacy sales in constant currency increasing 5.9 percent [273]. - Retail sales increased 1.1 percent for the three months ended February 28, 2025, with comparable retail sales in constant currency increasing 4.5 percent [265]. - Retail sales increased 5.1 percent for the six months ended February 28, 2025, with comparable retail sales in constant currency increasing 5.8 percent [274]. - Sales for the three months ended February 28, 2025 decreased by 23millionto23 million to 2.2 billion, with VillageMD sales down 101millionto101 million to 1.5 billion, while CareCentrix and Shields saw increases of 6.5% to 390millionand29.7390 million and 29.7% to 183 million respectively [285]. - Sales for the six months ended February 28, 2025 increased by 218millionto218 million to 4.3 billion, with VillageMD sales up 24millionto24 million to 3.1 billion, and CareCentrix and Shields also showing significant growth [293]. Operating Income and Profitability - Operating income for the three months ended February 28, 2025 decreased 51.7 percent to 101million,impactedbycurrencytranslationandcostinflation[269].−AdjustedoperatingincomeforthethreemonthsendedFebruary28,2025decreased4.7percentto101 million, impacted by currency translation and cost inflation [269]. - Adjusted operating income for the three months ended February 28, 2025 decreased 4.7 percent to 234 million, reflecting cost inflation and technology investments [271]. - Operating income for the six months ended February 28, 2025 decreased 25.5 percent to 242million,influencedbycostinflationandtechnologyinvestments[278].−AdjustedoperatingincomeforthesixmonthsendedFebruary28,2025increased3.6percentto242 million, influenced by cost inflation and technology investments [278]. - Adjusted operating income for the six months ended February 28, 2025 increased 3.6 percent to 401 million, driven by strong retail performance and market growth [279]. - Gross profit for the three months ended February 28, 2025 was 346million,anincreaseof346 million, an increase of 155 million compared to the same quarter last year, driven by higher contributions from VillageMD and growth at Shields [286]. - Gross profit for the six months ended February 28, 2025 was 585million,anincreaseof585 million, an increase of 269 million compared to the year-ago period, driven by contributions from VillageMD and Shields [294]. - Adjusted operating income for the three months ended February 28, 2025 improved by 150millionto150 million to 117 million, driven by higher contributions from VillageMD and growth at Shields [291]. - Adjusted EBITDA for the three months ended February 28, 2025 was 158million,animprovementof158 million, an improvement of 140 million compared to the same quarter last year, reflecting growth at VillageMD and Shields [292]. - Adjusted operating income for the six months ended February 28, 2025 improved by 271millionto271 million to 142 million, reflecting better performance from VillageMD and Shields [297]. - Adjusted EBITDA for the six months ended February 28, 2025 was 228million,animprovementof228 million, an improvement of 250 million compared to the year-ago period, indicating strong operational performance [298]. Net Loss and Impairments - The net loss attributable to Walgreens Boots Alliance for the six months ended February 28, 2025, was 3,118million,comparedtoanetlossof3,118 million, compared to a net loss of 5,975 million for the same period in 2024, indicating an improvement of 47.9% [311]. - The company recorded an impairment of goodwill, intangibles, and long-lived assets amounting to 5,343millionforthesixmonthsendedFebruary28,2025,downfrom5,343 million for the six months ended February 28, 2025, down from 13,090 million in the prior year, a reduction of 59.1% [311]. - Total adjustments to operating loss for the six months ended February 28, 2025, amounted to 7,190million,comparedto7,190 million, compared to 14,797 million for the same period in 2024, a decrease of 51.5% [311]. - The company recorded pre-tax gains of 157millionrelatedtothechangeinclassificationofitspreviouslyheldequitymethodinvestmentinBrightSpring[12].−TheCompanyhadtotaloperatingleaseobligationsof157 million related to the change in classification of its previously held equity method investment in BrightSpring [12]. - The Company had total operating lease obligations of 22.1 billion, with 2.4billionclassifiedascurrent[333].−Totalnon−cashimpairmentchargesforgoodwillandlong−livedassetswere2.4 billion classified as current [333]. - Total non-cash impairment charges for goodwill and long-lived assets were 5.4 billion and 5.7billionforthethreeandsixmonthsendedFebruary28,2025,respectively[9].CashFlowandFinancingActivities−Cash,cashequivalents,andrestrictedcashwere5.7 billion for the three and six months ended February 28, 2025, respectively [9]. Cash Flow and Financing Activities - Cash, cash equivalents, and restricted cash were 1.2 billion as of February 28, 2025, down from 3.2billionasofAugust31,2024[324].−TheCompanyhadoutstandingtotaldebtof3.2 billion as of August 31, 2024 [324]. - The Company had outstanding total debt of 8.0 billion as of February 28, 2025, with 1.4billionclassifiedascurrent[330].−Netcashusedforoperatingactivitiesimprovedto1.4 billion classified as current [330]. - Net cash used for operating activities improved to 339 million for the six months ended February 28, 2025, compared to 918millionforthesameperiodin2024[339].−NegativeoperatingcashflowsforthesixmonthsendedFebruary28,2025wereprimarilyduetolegalsettlementstotaling918 million for the same period in 2024 [339]. - Negative operating cash flows for the six months ended February 28, 2025 were primarily due to legal settlements totaling 1.1 billion [340]. - Net cash provided by investing activities was 342millionforthesixmonthsendedFebruary28,2025,downfrom342 million for the six months ended February 28, 2025, down from 902 million in the prior year [341]. - Total additions to property, plant, and equipment were 503millionforthesixmonthsendedFebruary28,2025,comparedto503 million for the six months ended February 28, 2025, compared to 858 million in the same period of 2024 [344]. - Net cash used for financing activities increased significantly to 2.0billionforthesixmonthsendedFebruary28,2025,comparedto2.0 billion for the six months ended February 28, 2025, compared to 127 million in the prior year [345]. - The Company suspended its cash dividend, which totaled 432millioninthesixmonthsendedFebruary28,2025,downfrom432 million in the six months ended February 28, 2025, down from 828 million in the same period of 2024 [350]. - As of February 28, 2025, the Company had repurchased 8.0billionofits8.0 billion of its 10.0 billion stock repurchase program [351]. Strategic Initiatives and Outlook - The Company anticipates cash needs over the next several years, including litigation and debt refinancing, as part of its decision to suspend cash dividends [321]. - The Company is exploring strategic monetization of non-core assets to provide additional liquidity [325]. - The Company's long-term credit ratings were downgraded to BB- with a negative outlook by Standard & Poor's and Ba3 with a stable outlook by Moody's [355].