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WBA’s full-year results bring double-digit earnings growth

Walgreens Boots Alliance on Thursday shared its full-year sales results for its fiscal 2018. The company reported a sales increase of 11.3% for fiscal year 2018, bringing its revenue to $131.5 billion, with adjusted earnings per share growing 18% to $6.02. For the fourth quarter, the company’s sales were $33.4 billion, with adjusted earnings per share of $1.48. The company’s adjusted net earnings for the full-year rose 23.2% to $5 billion.

“We are pleased to have delivered double-digit percentage growth in earnings per share while returning $6.8 billion to shareholders through share repurchases and dividends in fiscal 2018,” WBA executive vice chairman and CEO Stefano Pessina said. “The integration of the acquired Rite Aid stores is on track, and our pharmacy market share in the United States increased year-over-year on an annual basis. We are making progress on our partnership strategy both in the U.S. and internationally, including our most recent announcements with LabCorp, Kroger and Alibaba, which will provide additional opportunities for future growth.”

WBA’s U.S. retail pharmacy segment saw $25.5 billion in fourth-quarter sales — a year-over-year increase of 14.4%, with comparable-store sales up 0.3% from the previous year's fourth quarter. In the quarter, pharmacy sales — which make up 73.6% of the segment’s sales — grew 16.7%, which the company attributed to script growth from the acquisition Rite Aid stores and central specialty. Pharmacy comps increased 1.3%, which the company said indicated higher volume. Indeed, the segment filled 279.8 million prescriptions (including immunizations) adjusted to 30-day equivalents in the quarter — an 11.8% year-over-year increase. Comparable-store fills increased 1.3%, which WBA said was due to strategic partnerships offset in part by Medicare Part D. For the full year, the segment filled more than 1 billion prescriptions on a 30-day equivalent basis.

Citing data from IQVIA, WBA said that In the fourth quarter, the segment’s adjusted retail prescription market share increased by roughly 180 basis points to 22.3%. For the full year, that figure was 21.7%, compared with 20.2% in fiscal 2017. Rite Aid store additions drove quarterly retail sales growth of 8.3%, though retail comps were down 1.9%, which WBA said was due to decline in consumables and general merchandise, as well as personal care. These declines were partially offset by beauty and health-and-wellness growth.

WBA’s retail pharmacy international segment saw quarterly sales decline 1.9% to $2.9 billion, with comparable pharmacy sales down 3.4% on a constant currency basis. The company attributed that decline to lower prescription volume and a decline in pharmacy funding in the United Kingdom. Comps were down 0.9% on a constant currency basis, which WBA said was due to a decline in Boots UK beauty sales amid market challenges, offset by health-and-wellness sales growth. Excluding the U.K., WBA’s comps increased 1.1%, driven in part by growth in the Republic of Ireland and Thailand.

The company’s pharmaceutical wholesale business saw sales growth of 2.3%, hitting $5.6 billion. Comparable sales increased 4.7% on a constant currency basis which WBA said was due to strong growth in emerging markets. The division’s operating income was $163 million, which included a $49 increase from the company’s equity earnings in AmerisourceBergen. In the previous year's fourth quarter, the division had operating income of $96 million, which included an $8 million loss from its equity earnings in AmerisourceBergen.
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