Retail comparable sales in the United States helped boost Walgreens Boots Alliance sales in the fiscal first quarter to a beat over Wall Street estimates.
Walgreens reported a company loss of $3.72 billion, or $4.31 per share, versus company net earnings of $3.58 billion, or $4.13 per share, in the year-previous quarter.
Walgreens attributed the decrease to a $5.2 billion after-tax charge for opioid-related claims and litigation offset by a $900 million after-tax gain from the partial sale of the company’s equity method investment in AmerisourceBergen during the first quarter as well as a lapping $2.5 billion after-tax gain on the company’s investments in VillageMD and Shields Health Solutions in the fiscal 2022 quarter.
Adjusted net earnings were $1 billion, or $1.16 per share, versus $1.46 billion, or $1.68 per share, in the year-before period, the company stated. An analyst consensus estimate published by MarketBeat called for $1.14 per adjusted earnings per share and revenue of $33.04 billion.
First-quarter sales decreased 1.5% from the year-prior period to $33.38 billion but increased 1.1% on a constant currency basis. With the negative impact from AllianceRx Walgreens of 485 basis points excluded and the positive contributions from U.S. Healthcare M&A of 280 basis points, sales advanced 3.2% on a constant currency basis.
Operating loss was $6.15 billion versus operating income of $1.28 billion in the year-earlier quarter reflecting the charge for opioid-related claims and litigation. Adjusted operating income was $1 billion, a decrease of 42.2% on a constant currency basis due to lower volumes of COVID-19 vaccinations and testing compared to the peak 2022 period, planned payroll and IT investments in U.S. Retail Pharmacy as well as growth investments in U.S. Healthcare. Higher retail contribution in the U.S. and internationally partly offset the negative results.
U.S. Retail Pharmacy first quarter sales were $27.2 billion, down 3% year over year. Comparable sales increased by 3.8% from the year-past quarter while retail sales increased by 0.8% and comps increased by 1.4%. With tobacco excluded, comps increased 2.1% aided by strong cough, cold and flu sales partly offset by lower OTC test kits revenues. Beauty and personal care categories both gained benefiting from own-brand offerings and improved inventory availability.
In announcing the financial results, Walgreens CEO Rosalind Brewer said, “WBA delivered a solid start to the fiscal year, as we continue to accelerate our transformation to a consumer-centric healthcare company. We’re making significant progress in driving our U.S. Healthcare segment to scale and profit, including the recent VillageMD acquisition of Summit Health. Our core retail pharmacy businesses in both the United States and the United Kingdom remain resilient in challenging operating environments. Execution across segments reinforces our confidence in achieving full-year guidance, and our strategic actions are creating long-term shareholder value.”