Walgreens Boots Alliance (WBA 72.89, +0.58, +0.80%) was indicated
lower by 5.4% in pre-market but later saw recovery from its low open during the
morning session after reporting mixed results.
The convenience store operator reported above-consensus fourth quarter earnings of $1.48/share on a 10.9% year/year jump in revenue to $33.44 bln, which was shy of expectations. Adjusted operating income ticked up 0.1% year/year to $1.9 bln. The company generated $2.9 bln from operating activities, up 43% year/year.
Looking at the segment breakdown, Retail Pharmacy USA revenue grew 14.4% year/year to $25.5 bln. Comparable sales increased 0.3% year/year while also showing sequential improvement.
Pharmacy sales, which made up 73.6% of total segment sales, grew 16.7% year/year to $18.77 billion due to higher prescription volume resulting from the acquisition of Rite Aid. Comparable pharmacy sales grew 1.3% due to higher volume. The filled prescription count grew 11.8% year/year to 279.8 mln while prescriptions filled in comparable stores grew 1.3%.
Retail sales in the Pharmacy USA segment grew 8.3% while comparable sales decreased 1.9% with lower sales of consumables, general merchandise, and personal care outweighing growth in health and wellness and beauty. Segment gross profit grew 4.1% while adjusted gross profit rose 2.8%. Adjusted segment operating income inched up 0.1% to $1.4 bln.
Retail Pharmacy International sales declined 1.9% to $2.9 bln while comparable pharmacy sales fell 3.4% due to lower prescription volume and lower pharmacy funding in the United Kingdom. Comparable retail sales fell 0.9% due to weak beauty sales, which were partially offset by higher sales in health and wellness. Adjusted segment gross profit declined 1.1% while adjusted segment operating income fell 0.8% to $259 mln.
Pharmaceutical Wholesale sales grew 2.3% year/year to $5.6 bln. Adjusted operating income grew 0.5% to $222 mln.
Looking ahead, the company expects that earnings for fiscal year 2019 will be between $6.40/share and $6.70/share. The midpoint of the company's guidance is ahead of current market expectations.
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