Walgreens Boots Alliance(WBA) - 2025 Q2 - Quarterly Results

Financial Performance - Second quarter sales increased 4.1% year-over-year to $38.6 billion, with a 4.7% increase on a constant currency basis[5] - Adjusted earnings per share (EPS) decreased 47.3% to$ 0.63 compared to $1.20 in the year-ago quarter[11] - Net loss for the second quarter was$ 2.9 billion, a 51.7% decrease from a net loss of $5.9 billion in the year-ago quarter[9] - Operating loss for the second quarter was$ 5.6 billion, an improvement from a loss of $13.2 billion in the year-ago quarter[7] - The net loss attributable to Walgreens Boots Alliance for the three months ended February 28, 2025, was$ 2,853 million, a reduction from a net loss of $5,908 million in the same period last year, reflecting a decrease of 51.7%[51] - Net loss for the six months ended February 29, 2025, was$ 4,640 million, a significant improvement from a net loss of $12,600 million in the same period of 2024, representing a reduction of approximately 63.2%[55] - The diluted net loss per common share (GAAP) for the six months ended February 28, 2025, was$ (3.61), compared to $(6.93) for the same period in 2024, indicating an improvement of 47.9%[68] Sales and Revenue - U.S. Retail Pharmacy segment sales increased 5.3% to$ 30.4 billion, with comparable sales up 8.2%[21] - International segment sales were $6.1 billion, a 0.6% increase, with a 4.1% increase on a constant currency basis[26] - For the three months ended February 28, 2025, Walgreens Boots Alliance reported sales of$ 38,588 million, an increase from $37,052 million for the same period in 2024, representing a growth of 4.1%[51] - Total sales for the three months ended February 28, 2025, were$ 38,588 million, compared to $37,052 million for the same period in 2024, representing a year-over-year increase of approximately 4.1%[73] - The U.S. Retail Pharmacy segment reported sales of$ 30,380 million for the three months ended February 28, 2025, compared to $28,861 million for the same period in 2024, marking an increase of about 5.3%[73] Cash Flow and Assets - Free cash flow was negative$ 418 million, a $192 million improvement compared to the year-ago quarter[12] - Cash flows from operating activities showed a net cash used of$ 339 million for the six months ended February 29, 2025, compared to $918 million for the same period in 2024, indicating a 63.1% improvement[55] - The company reported a net cash provided by investing activities of$ 342 million for the six months ended February 29, 2025, down from $902 million in the prior year, reflecting a decrease of 62.1%[55] - Total assets decreased to$ 70,216 million as of February 28, 2025, down from $81,037 million as of August 31, 2024, representing a decline of 13.4%[52] - Walgreens Boots Alliance's cash and cash equivalents decreased to$ 702 million as of February 28, 2025, down from $1,319 million as of August 31, 2024, a decline of 46.9%[52] Strategic Initiatives - The company is withdrawing fiscal 2025 guidance due to a pending acquisition by Sycamore Partners[3] - The merger with Sycamore Partners is expected to close in the fourth quarter of calendar year 2025, pending approvals[35] - The company aims to enhance its business strategies and is currently undergoing a strategic review, which includes potential mergers and acquisitions[37] - Walgreens Boots Alliance is focused on cost-saving initiatives and growth strategies, including the Footprint Optimization Program, to improve financial performance moving forward[37] Impairments and Charges - The company reported a goodwill impairment charge of$ 3,653 million for the three months ended February 28, 2025, consistent with the charge of $12,369 million in the same period last year[51] - The company incurred impairment of goodwill, intangibles, and long-lived assets of$ 5,343 million for the three months ended February 28, 2025, compared to $13,090 million for the same period in 2024, a reduction of 59.1%[67] - The company recognized impairment of goodwill, intangibles, and long-lived assets of$ 3,252 million for the three months ended February 28, 2025[75] Operating Performance - The company's gross profit for the six months ended February 28, 2025, was $13,714 million, slightly down from$ 13,811 million in the prior year, indicating a decrease of 0.7%[51] - The adjusted gross profit for the three months ended February 28, 2025, was $6,963 million, slightly down from$ 7,068 million in the same period of 2024, indicating a decrease of about 1.5%[73] - The adjusted operating income for the three months ended February 28, 2025, was $785 million, down from$ 900 million in the same period of 2024, reflecting a decline of approximately 12.8%[74] - U.S. Healthcare segment reported an operating loss of $3,304 million for the three months ended February 28, 2025, compared to a loss of$ 13,059 million for the same period in 2024[75] - Adjusted EBITDA for the U.S. Healthcare segment was $158 million for the three months ended February 28, 2025, up from$ 17 million in the same period last year[75] Other Financial Metrics - The company incurred acquisition-related amortization expenses of $250 million for the three months ended February 28, 2025, compared to$ 270 million for the same period in 2024[74] - The effective tax rate (GAAP) for the three months ended February 28, 2025, was 5.0%, compared to 6.0% for the same period in 2024[79] - Adjusted effective tax rate excluding adjusted equity earnings in Cencora was 27.7% for the three months ended February 28, 2025, compared to (29.4)% for the same period in 2024[79] - The company recognized a pre-tax non-controlling interest benefit due to the amendment of the VillageMD Secured Loan, which is not indicative of normal operating performance[72] - The company made incremental pension contributions of $379 million during the three months ended February 29, 2024, as part of a bulk annuity policy acquisition[80]