Walgreens Boots Alliance sees lift in Q3 earnings
Walgreens Boots Alliance on Thursday reported a jump in third quarter earnings and unveiled a $10 billion share repurchase program, which executive vice chairman and CEO Stefano Pessina said demonstrates the retailer’s “confidence in future business performance.”
“I am pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow. We expect to continue to drive growth, bringing more patients to our U.S. pharmacies through the recent acquisition of Rite Aid stores and through strategic partnerships. The $10 billion share repurchase program announced this morning demonstrates our confidence in future business performance and, as ever, our focus on driving long-term stockholder value,” Pessina said.
For the third quarter ended May 31, earnings increased 15.5 percent to $1.3 billion compared with the same quarter a year ago, while GAAP diluted net earnings per share increased 26.2 percent to $1.35 compared with the same quarter a year ago.
Adjusted diluted net earnings per share increased 15 percent to $1.53 compared with the same quarter a year ago.
Sales in the third quarter totaled $34.3 billion, an increase of 14 percent from the year-ago quarter.
In its U.S. retail pharmacy division, third quarter sales were $25.9 billion, an increase of 15 percent over the year-ago quarter. Same-store sales decreased 1.2 percent compared with the same quarter a year ago.
Pharmacy sales, which accounted for 72.5 percent of the division’s sales in the quarter, increased 19.3 percent compared with the year-ago quarter, primarily due to higher prescription volume from the acquisition of Rite Aid stores and from central specialty. Pharmacy same-store sales were remained flat, as brand inflation was offset by reimbursement pressure and the impact of generics.
Retail sales increased 5.2 percent during the quarter, while same-store sales were down 3.8 percent.
During the quarter, the company completed the acquisition of all 1,932 Rite Aid stores and continues to expect to transition three distribution centers and related inventory beginning in fiscal 2019 and to complete the integration of acquired stores and related assets by the end of fiscal 2020.
In addition, the company announced that its board of directors has authorized a $10 billion share repurchase program and declared a quarterly dividend of 44 cents per share, an increase of 10 percent.
“Our new $10 billion share repurchase program demonstrates our commitment to return cash to stockholders in the form of dividends and share repurchases over the long term,” said executive vice president and global chief financial officer James Kehoe.
The company also raised the lower end of its guidance for fiscal year 2018 by 5 cents per share and now anticipates adjusted diluted net earnings per share of $5.90 to $6.05.
This guidance assumes current exchange rates for the rest of the fiscal year. As previously announced, the company does not expect Rite Aid to significantly impact fiscal 2018 adjusted diluted net earnings per share.
“I am pleased that, in what has been a challenging environment, we have again delivered solid earnings per share growth combined with healthy cash flow. We expect to continue to drive growth, bringing more patients to our U.S. pharmacies through the recent acquisition of Rite Aid stores and through strategic partnerships. The $10 billion share repurchase program announced this morning demonstrates our confidence in future business performance and, as ever, our focus on driving long-term stockholder value,” Pessina said.
For the third quarter ended May 31, earnings increased 15.5 percent to $1.3 billion compared with the same quarter a year ago, while GAAP diluted net earnings per share increased 26.2 percent to $1.35 compared with the same quarter a year ago.
Adjusted diluted net earnings per share increased 15 percent to $1.53 compared with the same quarter a year ago.
Sales in the third quarter totaled $34.3 billion, an increase of 14 percent from the year-ago quarter.
In its U.S. retail pharmacy division, third quarter sales were $25.9 billion, an increase of 15 percent over the year-ago quarter. Same-store sales decreased 1.2 percent compared with the same quarter a year ago.
Pharmacy sales, which accounted for 72.5 percent of the division’s sales in the quarter, increased 19.3 percent compared with the year-ago quarter, primarily due to higher prescription volume from the acquisition of Rite Aid stores and from central specialty. Pharmacy same-store sales were remained flat, as brand inflation was offset by reimbursement pressure and the impact of generics.
Retail sales increased 5.2 percent during the quarter, while same-store sales were down 3.8 percent.
During the quarter, the company completed the acquisition of all 1,932 Rite Aid stores and continues to expect to transition three distribution centers and related inventory beginning in fiscal 2019 and to complete the integration of acquired stores and related assets by the end of fiscal 2020.
In addition, the company announced that its board of directors has authorized a $10 billion share repurchase program and declared a quarterly dividend of 44 cents per share, an increase of 10 percent.
“Our new $10 billion share repurchase program demonstrates our commitment to return cash to stockholders in the form of dividends and share repurchases over the long term,” said executive vice president and global chief financial officer James Kehoe.
The company also raised the lower end of its guidance for fiscal year 2018 by 5 cents per share and now anticipates adjusted diluted net earnings per share of $5.90 to $6.05.
This guidance assumes current exchange rates for the rest of the fiscal year. As previously announced, the company does not expect Rite Aid to significantly impact fiscal 2018 adjusted diluted net earnings per share.