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Walgreens Boots Alliance, Inc. WBA delivered adjusted earnings per share (EPS) of 38 cents in the third quarter of fiscal 2025, down 39.7% from the year-ago quarter’s figure (down 39.6% at the constant exchange rate or CER). However, the figure topped the Zacks Consensus Estimate by 11.76%.
GAAP loss per share for the third quarter was 20 cents compared to the year-ago quarter’s EPS of 40 cents.
Walgreens Boots recorded total sales of $38.99 billion in the fiscal third quarter, up 7.2% year over year and 6.9% at CER. The top line also surpassed the Zacks Consensus Estimate by 6.5%.
Following the announcement, Walgreens shares rose 0.9% in the pre-market session today.
The company currently operates its business through three reportable segments: U.S. Retail Pharmacy, International and U.S. Healthcare.
The segment’s sales increased 7.8% year over year to $30.7 billion in the fiscal third quarter. Comparable sales jumped 10.3% from the year-ago quarter’s levels.
Pharmacy sales were up 11.8% from the year-ago quarter’s figures, and comparable pharmacy sales increased 14.6%, each benefiting from higher branded drug inflation and mix impacts.
Retail sales fell 5.3%, and comparable retail sales were down 2.4% year over year due to weaker sales in grocery and household, health and wellness, and beauty.
Revenues in the International division rose 7.8% on a year-over-year basis and increased 5.9% at CER to $6.2 billion in the fiscal third quarter.
In Germany, wholesale business sales increased 6.8% in the fiscal third quarter.
Walgreens Boots Alliance, Inc. price-consensus-eps-surprise-chart | Walgreens Boots Alliance, Inc. Quote
Boots UK sales rose 5% year over year. Its comparable retail sales advanced 6%. Further, Boots UK comparable pharmacy sales increased 5.4% year over year at CER.
U.S. Healthcare reported fiscal third-quarter revenues of $2.1 billion. Within the segment, VillageMD sales decreased 6.5% year over year, while CareCentrix and Shields sales increased 11.6% and 24.8%, respectively.
The gross profit in the reported quarter increased 075% year over year to $6.51 billion despite an 8.7% rise in the cost of sales. The gross margin contracted 108 basis points to 16.7%.
Selling, general and administrative (SG&A) expenses increased 1.6% year over year to $6.49 billion.
The company reported an adjusted operating profit of $13 million for the quarter compared with the year-ago period’s profit of $66 million. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Walgreens Boots exited the third quarter of fiscal 2025 with cash and cash equivalents of $766 million compared with $702 million at the second quarter-end.
The total debt was $7.37 billion compared with $8.01 billion at the end of the fiscal second quarter.
The cumulative cash used by operating activities at the end of the third quarter of fiscal 2025 was $245 million compared with the year-ago period’s outflow of $314 million.
On March 6, 2025, WBA signed a definitive agreement to be acquired by entities affiliated with Sycamore Partners. The merger is expected to close in the third or fourth quarter of the calendar year 2025, pending shareholder and regulatory approvals and other conditions to closing.
Following the close of the transaction, WBA will become a private company, and its common stock will be delisted from the Nasdaq stock market. In light of the pending transaction, the company has withdrawn issuing fiscal 2025 guidance. Furthermore, Walgreens' previously issued guidance for the full year is no longer in effect.
Walgreens Boots ended the third quarter of fiscal 2025 with better-than-expected earnings and revenues. The results reflected continued improvement in the U.S. Healthcare segment and gains from the cost savings initiatives. At the same time, U.S. front-end sales remained soft. Walgreens Boots’ bottom line was down on a year-over-year basis. A contraction of the gross margin in the quarter is discouraging. WBA management remains committed to its turnaround plan, which will require time and a disciplined, balanced approach to align future cash needs with necessary investments in a changing pharmacy and retail environment.
Walgreens Boots currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the broader medical space are Veeva Systems VEEV, Intuitive Surgical ISRG and Integer Holdings ITGR.
Veeva Systems, currently sporting a Zacks Rank #1 (Strong Buy), reported first-quarter fiscal 2026 adjusted EPS of $1.97, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $759 million beat the consensus mark by 4.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
VEEV has an estimated long-term earnings growth rate of 23.3% compared to the industry’s 19.1% growth. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 10%.
Intuitive Surgical, carrying a Zacks Rank #2 at present, posted first-quarter 2025 adjusted EPS of $1.81, exceeding the Zacks Consensus Estimate by 5.9%. Revenues of $2.25 billion surpassed the Zacks Consensus Estimate by 3.3%.
ISRG has an estimated long-term earnings growth rate of 15.1% compared to the industry’s 14.4% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.6%.
Integer Holdings, carrying a Zacks Rank #2, reported a first-quarter 2025 adjusted EPS of $1.14, which beat the Zacks Consensus Estimate by 1.8%. Revenues of $414.8 million topped the Zacks Consensus Estimate by 0.4%.
ITGR has a long-term earnings growth rate of 18.4% compared to the industry’s 14.4% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 2.8%.
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This article originally published on Zacks Investment Research (zacks.com).
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Walgreens Sales Rise on Improvements in U.S. Healthcare Segment, Cost Cutting Efforts
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