Walgreens Boots Alliance Inc · Q3 2023 earnings

Briefing

Walgreens reported adjusted EPS growth despite facing challenges from lower COVID-19 demand and consumer spending uncertainty. The company revised its full-year guidance and initiated actions to improve profitability, including raising the cost savings program target.

Walgreens Boots Alliance (WBA) reported an 8.6% increase in sales to $35.4 billion for the third quarter of fiscal year 2023. Adjusted EPS increased by 3.3% to $1.00. However, the company revised its full-year adjusted EPS guidance to $4.00 - $4.05 due to consumer market trends and lower COVID-19 demand. WBA is taking immediate actions to improve profitability, including raising its Transformational Cost Management Program target to $4.1 billion.

• Third quarter sales increased 8.6 percent year-over-year to $35.4 billion, and up 8.9 percent on a constant currency basis.
• Adjusted EPS increased 3.3 percent to $1.00, up 3.6 percent on a constant currency basis reflecting a 19.5 percent headwind from significantly lower COVID-19 vaccine and testing volumes.
• Revised full-year adjusted EPS guidance to $4.00 to $4.05 from $4.45 to $4.65, to reflect consumer and category conditions, lower COVID-19 contribution, and a more cautious macroeconomic forward view.
• Raising Transformational Cost Management Program target from $3.5 billion to $4.1 billion in total savings.

Headline financials

Revenue & EPS history

Walgreens Boots Alliance expects adjusted EPS of $4.00 to $4.05 for the full fiscal year 2023, reflecting challenging consumer and macroeconomic conditions, and lower COVID-19 vaccine and testing volumes. Preliminary expectations for fiscal year 2024 include low- to mid-single digit adjusted operating income growth.