Walgreens Continues Consumer Health Care Push in Q1

Transformation to new business model punctuates fiscal quarter
Emily Crowe, Progressive Grocer
Walgreens Interior Main Image
Walgreens Boots Alliance reported a fiscal quarter that keeps it in line with its full-year adjusted EPS guidance.

After completing its first quarter of fiscal year 2023, Walgreens Boots Alliance, Inc. (WBA) is revealing a mixed bag of financial highlights amid a strengthened push to transform itself into a consumer-centric health care company. 

For the first quarter, sales decreased 1.5% year-over-year to $33.4 billion, while adjusted EPS decreased 30.8% to $1.16, down 29.9% on a constant currency basis. Operating loss was $6.2 billion during the quarter, compared to year-over-year operating income of $1.3 billion. According to the company, the quarter’s operating loss reflects a $6.5 billion pre-tax charge for opioid-related claims and litigation.

Additionally, Walgreens invested $3.5 billion in debt and equity to support VillageMD's acquisition of Summit Health, and sold 19.2 million shares of AmerisourceBergen common stock in November and December, with after-tax cash proceeds of $3 billion.

Also during the quarter, Walgreens administered 8.4 million vaccinations and saw U.S. pharmacy comparable script volume growth of 2.1%, excluding immunizations. U.S. retail comparable sales grew 1.4%, or 2.1% excluding tobacco. 

"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,” said CEO Rosalind Brewer. “Our core retail pharmacy businesses in both the United States and 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."

Walgreens plans to maintain full-year adjusted EPS guidance of $4.45 to $4.65 as strong core business growth is offset by lapping fiscal year 2022 COVID-19 execution, and currency headwinds. The company also anticipates increased clarity into its long-term growth algorithm and will build to low-teens adjusted EPS growth in fiscal year 2025 and beyond.

Deerfield, Ill.-based Walgreens, which operates nearly 9,000 retail locations across the United States, Puerto Rico and the U.S. Virgin Islands, is No. 5 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.

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