Walgreens Boots Alliance(US:WBA)2025-01-10 12:15Financial Performance - First quarter loss per share was $0.31, compared to $0.08 in the year-ago quarter, with adjusted EPS decreasing by 23.4% to $0.51[2] - Net loss attributable to Walgreens Boots Alliance, Inc. (GAAP) was $265 million for Q1 2024, compared to $67 million in Q1 2023[27] - Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. (Non-GAAP) were $440 million for Q1 2024, down from $571 million in Q1 2023[27] - Diluted net loss per common share (GAAP) was $0.31 in Q1 2024, compared to $0.08 in Q1 2023[27] - Adjusted diluted net earnings per common share (Non-GAAP) were $0.51 in Q1 2024, down from $0.66 in Q1 2023[27] - Net loss for the three months ended November 30, 2024, was $605 million, compared to $278 million in the same period in 2023[56] - First quarter operating loss was $245 million compared to an operating loss of $39 million in the year-ago quarter[44] - Net loss in the first quarter was $265 million compared to a net loss of $67 million in the year-ago quarter[45] - Adjusted earnings per share (EPS) was $0.51 versus $0.66 in the year-ago quarter[42] Sales and Revenue - First quarter sales increased by 7.5% to $39.5 billion, with growth across all business segments[17] - Total sales for the three months ended November 30, 2024, were $39.459 billion, with U.S. Retail Pharmacy contributing $30.866 billion, International $6.425 billion, and U.S. Healthcare $2.172 billion[31] - Total sales for the three months ended November 30, 2023, were $36.707 billion, with U.S. Retail Pharmacy contributing $28.944 billion, International $5.832 billion, and U.S. Healthcare $1.931 billion[33] - First quarter sales increased 7.5% year-over-year to $39.5 billion, up 6.9% on a constant currency basis[42] - U.S. Retail Pharmacy segment sales increased 6.6% to $30.9 billion, with comparable sales up 8.5%[46] - International segment sales increased 10.2% to $6.4 billion, with a favorable currency impact of 3.6%[47] - U.S. Healthcare segment sales grew to $2.2 billion, with VillageMD sales up 9%, CareCentrix up 16%, and Shields up 30%[48] Pharmacy and Prescription Performance - Pharmacy sales increased by 10.4%, with comparable pharmacy sales up 12.7%, driven by higher branded drug inflation and prescription volume[3] - Total prescriptions filled in the quarter increased by 1.5% to 316.3 million, with comparable prescriptions excluding immunizations up 3.5%[3] - Boots UK comparable pharmacy sales increased by 10.9%, and retail sales grew by 8.1%, with Boots.com sales up 30%[4] Operating Income and EBITDA - Operating loss improved to $325 million from $436 million in the prior year, with adjusted operating income turning positive at $25 million[5] - Adjusted EBITDA improved by $109 million to $70 million, driven by growth in VillageMD and Shields[5] - Adjusted operating income increased by 17.9% to $168 million, led by strong retail performance in Boots UK and growth in Germany[20] - Adjusted operating income for the three months ended November 30, 2024, was $593 million, with U.S. Retail Pharmacy contributing $441 million, International $168 million, and U.S. Healthcare $25 million[31] - Adjusted operating income for the three months ended November 30, 2023, was $687 million, with U.S. Retail Pharmacy contributing $694 million, International $142 million, and U.S. Healthcare a loss of $96 million[33] - Adjusted EBITDA for the U.S. Healthcare segment improved to $70 million in Q3 2024, compared to a loss of $39 million in the same period last year[35] Cash Flow and Financial Position - Net cash used for operating activities improved by $141 million to $140 million, with free cash flow improving by $363 million to negative $424 million[18] - Free cash flow was $(424) million compared to $(788) million in the year-ago quarter[39] - Net cash used for operating activities decreased to $140 million in 2024 from $281 million in 2023[56] - Additions to property, plant, and equipment decreased to $284 million in 2024 from $506 million in 2023[56] - Proceeds from debt were $3.229 billion in 2024, compared to $3.826 billion in 2023[56] - Payments of debt increased to $4.679 billion in 2024 from $3.776 billion in 2023[56] - Net cash used for financing activities was $1.685 billion in 2024, compared to net cash provided by financing activities of $186 million in 2023[56] - Net decrease in cash, cash equivalents, and restricted cash was $1.910 billion in 2024, compared to $10 million in 2023[56] Retail Performance - Retail sales decreased by 6.2%, with comparable retail sales down 4.6%, due to a weaker cough cold flu season and lower discretionary sales[19] - Boots UK comparable pharmacy sales increased by 10.9%, and retail sales grew by 8.1%, with Boots.com sales up 30%[4] Adjustments and Non-GAAP Measures - Total adjustments to operating loss were $838 million in Q1 2024, up from $726 million in Q1 2023[27] - Footprint optimization charges were $333 million in Q1 2024, primarily related to restructuring activities[27][28] - Acquisition-related amortization was $269 million in Q1 2024, compared to $275 million in Q1 2023[27][28] - Loss on certain non-hedging derivatives was $200 million in Q1 2024, down from $366 million in Q1 2023[27] - VillageMD debt amendment resulted in a $137 million pre-tax non-controlling interest benefit in Q1 2024[27][30] - The company does not provide a reconciliation for non-GAAP estimates to GAAP financial measures on a forward-looking basis due to inherent difficulties in forecasting[58] - Comparable sales, pharmacy sales, and retail sales for the International segment are presented on a constant currency basis, a non-GAAP financial measure[60] Gross Profit and Margins - Adjusted gross profit for the same period was $6.812 billion, with U.S. Retail Pharmacy at $5.251 billion, International at $1.303 billion, and U.S. Healthcare at $253 million[31] - Adjusted gross profit for the three months ended November 30, 2023, was $6.850 billion, with U.S. Retail Pharmacy at $5.493 billion, International at $1.211 billion, and U.S. Healthcare at $146 million[33] - Gross margin (GAAP) for U.S. Retail Pharmacy was 17.0%, International 20.3%, and U.S. Healthcare 11.0% for the three months ended November 30, 2024[31] - Gross margin (GAAP) for U.S. Retail Pharmacy was 18.8%, International 20.8%, and U.S. Healthcare 6.5% for the three months ended November 30, 2023[33] - Adjusted operating margin (Non-GAAP) for the three months ended November 30, 2024, was 1.2% for U.S. Retail Pharmacy, 2.6% for International, and 1.2% for U.S. Healthcare[31] Other Financial Metrics - Weighted average common shares outstanding, diluted were 865.6 million in Q1 2024, up from 864.0 million in Q1 2023[27] - Adjusted effective tax rate excluding adjusted equity earnings (loss) in Cencora was 28.0% compared to 24.7% in the year-ago quarter[38] - Equity earnings (loss) in Cencora (GAAP) was $(9) million compared to $42 million in the year-ago quarter[37] - Depreciation and amortization expenses increased to $625 million in 2024 from $616 million in 2023[56]