Home Walgreens Debuts Strategy As It Details Strong Financials
October 15, 2021
Walgreens Debuts Strategy As It Details Strong Financials
Posted In: Retail Articles

By Mike Duff

Contributing Editor

For the fiscal year and fourth quarter 2021, Walgreens Boots Alliance has announced financial results that included a beat on Wall Street sales and earnings predictions, and it revealed a new corporate strategy.

The company also announced a new consumer-centered healthcare strategy, which features the launch of Walgreens Health, a new business segment enabled by investments in VillageMD and CareCentrix and accelerates the company’s capabilities in primary care, post-acute care and home care. A $5.2 billion investment in VillageMD will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in more than 30 markets across the United States by 2025 and 1,000 by 2027, the company stated, with more than half of those practices in medically underserved communities.

In the fourth quarter, Walgreens posted net earnings from continuing operations of $358 million, or 41 cents per diluted share, versus $337 million, or 39 cents per diluted share, in the year-before period. Adjusted net earnings from continuing operations were $1.02 billion, or $1.17 per diluted share, versus $786 million, or 91 cents per diluted share, in the year-previous quarter.

The company topped a MarketBeat published analyst average diluted earnings per share estimate of $1.02 while also beating a sales estimate of $33.39 billion.

WBA fourth-quarter sales from continuing operations advanced 12.8% from the year-past quarter to $34.26 billion and 11.8% on a constant currency basis, reflecting strong growth in both the International and United States segments, the company asserted. Operating income from continuing operations increased 49.7% to $910 million versus the year-earlier period. Adjusted operating income from continuing operations increased 22.9% on a reported currency basis to $1.23 billion versus the year-previous period and 22.1% on a constant currency basis, with significant gross profit growth across pharmacy and retail in the United States and higher International segment sales and profitability due to strong operational performance and ongoing recovery in the United Kingdom, Walgreens indicated, where COVID-19 restrictions were lifted in July.

Fourth-quarter sales in the United States were $28.76 billion, up 6.6%, year over year as comparable store sales increased 8.1%. WBA noted that retail sales gained 6.5% as comparable retail sales increased 6.2% year over year. With tobacco and e-cigarettes sales excluded as Walgreens phases them out, retail comps increased 7.2%, reflecting broad-based growth across all categories with  health and wellness sales up 14% aided by cough cold flu, at-home COVID-19 tests and vitamins

Full-year net earnings from continuing operations were $1.99 billion, or $2.30 per diluted share, versus $180 million, or 20 cents per diluted share, in the period a year earlier. Adjusted net earnings from continuing operations were $4.26 billion, or $4.91 per diluted share, versus $3.77 billion, versus $4.28 per diluted share, in the year previous period.

Fiscal 2021 sales gained  8.6% year over year to $132.51 billion, up 7.5% on a constant currency basis. Operating income from continuing operations in fiscal 2021 increased to $2.34 billion compared with $982 million in the period a year previous while adjusted operating income from continuing operations increased 8.2% on a reported basis to $5.12 billion from the period a year prior, up 7.7% on a constant currency basis, Walgreens reported.

In announcing the financials, WBA CEO Roz Brewer said, “Our fourth quarter and fiscal year results exceeded expectations, driven by strong performance in our core business. Comparable U.S. pharmacy and retail sales both saw robust growth and recovery continued in our U.K. business as COVID-19 restrictions eased in the quarter. I remain extremely proud of our team members’ unwavering commitment to meeting the needs of our patients, customers and communities. The role of the pharmacist and local pharmacy is now more vital than ever.”

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