Walgreens Boots Advances Q4, Fiscal Year Earnings

Following the announcement of Walgreens’ potential acquisition of Rite Aid, for the fourth quarter that ended August 31, Walgreens Boots Alliance posted company net earnings of $26 million, or two cents per diluted share, versus a net loss of $221 million, or 23 cents per diluted share, in the year-earlier period. Adjusted company net earnings increased 30.1% in the quarter to $969 million while company net earnings per diluted share increased 14.3% to 88 cents compared with the same quarter a year ago.

Adjusted company earnings per diluted share beat a Zacks Investment Research analyst average estimate by seven cents.

Net sales in the fourth quarter advanced 49.7% to $28.52 billion versus the year-ago period, the company noted, largely due to the inclusion of Alliance Boots consolidated results after its merger with Walgreens. The companies merged in December 2014.

For the full fiscal year, Walgreens Boot Alliance posted company net earnings of $4.22 billion, or $4 per diluted share, versus $1.93 billion, or $2 per diluted share, in the year earlier. Adjusted company net earnings increased 28.9% to $4.1 billion versus fiscal 2014 while company adjusted net earnings per diluted share increased 18.3% to $3.88 compared with the same period a year ago. Net sales in fiscal 2015 advanced 35.4% to $103.44 billion versus the year-earlier period.

Fourth quarter total sales for the Retail Pharmacy USA division, consisting primarily of the Walgreens and Duane Reade operations, were $19.9 billion, up 4.7% over the year ago quarter. Total sales in comparable drug stores increased 6.5% while retail sales gained 0.4% in the fourth quarter with an increase in basket size partially offset by lower customer traffic versus last year’s fourth quarter.

For the full fiscal year, total sales for the Retail Pharmacy USA division increased 6% to $81 billion, versus the previous fiscal year. Comp store sales increased 6.4% while comp retail sales gained 1.5% with an increase in basket size partially offset by lower customer traffic versus the previous fiscal year.

“We are pleased with our progress and performance in the fourth quarter and in our first fiscal year since launching Walgreens Boots Alliance,” stated the company’s executive vice chairman and CEO, Stefano Pessina. “While we have much work to do and operate in some challenging markets, we are excited and energized by the outlook and opportunities ahead as we put in place our strategies for long-term, sustainable growth. We believe we can shape the future of health care around the world through our ability to bring global solutions to local communities, benefiting all participants, populations and stakeholders.”

As part of its previously announced restructuring program, during the fourth quarter, the company said it closed 75 stores in the U.S. division for a total of 84 store closings in the fiscal year as part of a plan to close approximately 200 stores; reorganize divisional and field operations; drive operating efficiencies; and streamline information technology and other functions.

With its retail, pharmacy, health and distribution operations, Walgreens Boots Alliance has a presence in more than 25 countries and operates 13,100 stores in 11 countries.