NASDAQ$WBA

Walgreens Boots Alliance Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Walgreens' Q4 2022 earnings exceeded expectations, with long-term targets raised for the U.S. Healthcare segment.

Walgreens Boots Alliance reported Q4 sales of $32.4 billion, a 5.3% decrease year-over-year. The company's loss per share was $0.48, while adjusted EPS decreased by 31.8% to $0.80. Despite these declines, Walgreens is raising its U.S. Healthcare fiscal 2025 sales target and expects low-teens adjusted EPS growth in fiscal year 2025 and beyond.

  • Q4 sales decreased by 5.3% year-over-year to $32.4 billion.
  • Loss per share from continuing operations was $0.48, a decrease of $0.89 from the year-ago quarter.
  • Adjusted EPS decreased 31.8% to $0.80, down 30.0% on a constant currency basis.
  • Raising U.S. Healthcare fiscal 2025 sales target to $11 billion to $12 billion, with the segment expected to achieve positive adjusted EBITDA by fiscal year 2024.

Headline financials

Total Revenue

$32.4B

Previous: $34.3B-5.3%
EPS (adj)

$0.80

Previous: $1.17-31.6%
Capital Expenditures

$493M

Previous: $378M+30.4%
Free Cash Flow

-$407M

Previous: $867M-146.9%
Net Income

-$415M

Previous: $358M-215.9%
Operating Income

-$822M

Previous: $910M-190.3%
Gross Profit

$6.41B

Previous: $7.5B-14.6%
Cash & Equivalents

$1.36B

Previous: $1.19B+13.8%
Total Assets

$90.1B

Previous: $81.3B+10.9%
Stock-Based Comp

$125M

Previous: $35M+257.1%

Revenue & EPS history

Walgreens · Revenue · Quarterly

$32.4B

Q4 2022-5.3%vs Q4 2021
Beat estimate in 12 of 15 quarters(80%)
ActualEstimate

Revenue by segment

Walgreens · $7.76B total across 2 segments · Q4 2023

  • International
    $5.78B
  • U.S. Healthcare
    $1.97B+217.0%

Forward guidance

Walgreens Boots Alliance expects an adjusted EPS of $4.45 to $4.65 for the full fiscal year 2023. The company is also raising the U.S. Healthcare fiscal year 2025 sales target to $11 billion to $12 billion.

Tailwinds

  • Healthy core business growth of 8 to 10 percent in constant currency
  • Raising U.S. Healthcare fiscal year 2025 sales target to $11 billion to $12 billion
  • The U.S. Healthcare segment is expected to achieve positive adjusted EBITDA by fiscal year 2024.
  • Reconfirmed expectation to achieve low-teens adjusted EPS growth in fiscal year 2025.
  • Management will provide additional details during the earnings call presentation.

Headwinds

  • Adverse currency movements of approximately 2 percent
  • Headwind of 15 to 17 percent from lower COVID-19 vaccination volumes.
  • Operating loss in the quarter reflects a $783 million non-cash impairment charge related to intangible assets in Boots UK.
  • Operating loss in the quarter reflects higher costs related to the Transformational Cost Management Program.
  • Adjusted operating income from continuing operations was $744 million, a decrease of 38.2 percent on a constant currency basis, reflecting lower U.S. pharmacy operating results as it lapped higher volumes of prior year COVID-19 vaccinations, and growth investments in U.S. Healthcare

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 16 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

-0.1%

Avg return

Earnings day

+0.4%

Avg return

5 days after

-1.9%

Avg return

30 days after

53%

33 / 62 earnings

Positive

+29.1%

Q1 2025

Best reaction

-22.7%

Q3 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2025
Q3 2025+0.4%+1.5%+2.7%
Q2 2025-1.1%+0.5%+4.1%
Q1 2025+29.1%+36.1%+10.0%
Q4 2024+23.0%+18.7%-2.0%
Q3 2024-22.7%-26.0%-24.5%
Q2 2024-7.0%-10.9%-15.7%
Q1 2024-2.2%-0.6%-11.4%
Q4 2023+2.9%+2.1%-7.3%
Q3 2023-7.9%-10.2%-3.0%
Q2 2023+3.7%+5.0%+6.6%
Q1 2023-2.3%-2.1%-1.1%
Q4 2022+4.1%+3.8%+29.4%
Q3 2022-5.7%-5.7%-2.9%
Q2 2022-7.6%-8.4%-10.6%
Q1 2022-0.3%+0.6%-10.0%
Q4 2021+3.5%+1.5%+4.8%
Q3 2021-8.4%
Q2 2021+3.3%
Q1 2021+5.1%
Q4 2020+4.2%
Q3 2020-5.1%
Q2 2020-5.4%
Q1 2020-7.8%
Q4 2019+1.5%
Q3 2019+4.4%
Q2 2019-13.6%
Q1 2019-8.2%
Q4 2018+1.6%
Q3 2018-9.4%
Q2 2018-0.7%
Q1 2018-3.4%
Q4 2017-0.3%
Q3 2017+1.6%
Q2 2017-1.0%
Q1 2017+0.1%
Q4 2016+5.7%
Q3 2016-3.6%
Q2 2016-3.0%
Q1 2016+1.8%
Q4 2015-11.9%
Q3 2015+8.4%
Q1 2014+4.9%
Q2 2015+4.9%
Q4 2013+4.9%
Q1 2015+3.2%
Q4 2014-0.9%
Q3 2014+0.6%
Q2 2014+1.0%
Q3 2013-1.0%
Q2 2013+0.4%
Q1 2013+1.6%
Q4 2012+1.4%
Q3 2012-3.2%
Q2 2012-1.9%
Q1 2012+4.1%
Q4 2011+0.4%
Q3 2011-0.9%
Q2 2011+1.8%
Q1 2010+2.5%
Q4 2010+1.8%
Q3 2010-0.1%
Q2 2009+0.5%

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