Walgreens beats Street with Q4 earnings and revenue
Although Walgreens Boots Alliance Inc. swung from profit to loss in the fourth quarter of fiscal 2022, the drugstore giant still exceeded the expectations of Wall Street analysts.
Walgreens reported a fourth quarter net loss of $415 million, compared to net earnings of $538 million in the same quarter a year earlier, which it attributed to a decline in operating income caused by factors such as shrinking volume of customers seeking COVID-19 vaccinations. The fourth quarter loss per share was $0.48, a decrease of $0.89 from the year-ago quarter.
Fourth quarter sales decreased 5.3% year-over-year, to $32.4 billion from $34.3 billion. Walgreens administered 2.9 million COVID-19 vaccinations and 3.4 million PCR tests in the fourth quarter of fiscal 2022. The retailer has administered over 24.9 million boosters for the program to date.
[Read more: Walgreens buys rest of CareCentrix for $400 million; taps health exec]
Overview of Fiscal Year 2022 results
Sales in fiscal 2022 increased 0.1% from the year-ago period to $132.7 billion. Net earnings totaled $4.3 billion in fiscal 2022, up 72% from $2.5 billion in the year-ago period, reflecting a $2.5 billion after-tax gain in the first quarter due to the remeasurement of the company's previously held investments in VillageMD and Shields Health Solutions, and a $1.2 billion charge, net of tax, in the prior fiscal year from the company's equity earnings in AmerisourceBergen.
EPS for fiscal 2022 increased to $5.01, compared with $2.30 in the year-ago period.
Fiscal Year 2023 guidance
For the full fiscal year 2023, Walgreens Boots Alliance expects adjusted earnings per share (EPS) of $4.45 to $4.65. Core business growth of 8 to 10% in constant currency is expected to be more than offset by adverse currency movements of approximately 2% and by a headwind of 15 to 17% from lower COVID-19 vaccination volumes.
Additionally, the company is raising the U.S. healthcare fiscal year 2025 sales target to $11 billion to $12 billion, from $9 billion to $10 billion previously. The segment is expected to achieve positive adjusted EBITDA by fiscal year 2024. The company reconfirmed its expectation to achieve low-teens adjusted EPS growth in fiscal year 2025.
"Walgreens Boots Alliance has delivered ahead of expectations in the first year of our transformation to a consumer-centric healthcare company,” said Rosalind Brewer, CEO of Walgreens Boots Alliance. “Our resilient business achieved growth while navigating macroeconomic headwinds. Fiscal 2023 will be a year of accelerating core growth and rapidly scaling our U.S. healthcare business. Our execution to date provides us visibility and confidence to increase the long-term outlook for our next growth engine and reconfirm our path to low-teens adjusted EPS growth. Our strategic actions are unlocking sustainable shareholder value as we simplify the company and continue our journey to being a healthcare leader."
Based in Deerfield, Ill., Walgreens Boots Alliance is an integrated healthcare, pharmacy and retail company with approximately 13,000 locations across the U.S., Europe and Latin America. It operates in nine countries through its portfolio of consumer brands: Walgreens, Boots, Duane Reade, the No7 Beauty Company, Benavides in Mexico and Ahumada in Chile. Additionally, Walgreens Boots Alliance has a portfolio of healthcare-focused investments located in several countries, including China and the U.S.