US: Walgreens Boots Serves Up Mixed Q3 Results

Walgreens Boots Alliance has reported a mixed set of results for its fiscal third quarter, as better-than-expected profit growth couldn’t offset disappointment with its revenue figures.

For the quarter, adjusted earnings per share were up 15.7% year-on-year, although reported net profit fell by 15.3% to $1.1bn.  That figure easily topped analysts’ estimates, but a 2.4% increase in sales to $29.5bn (+3.3% constant-currency) came in below expectations.

WBA said it was hurt by weak demand for OTC drugs in particular, and noted that while US pharmacy sales were up 6% on a like-for-like basis, front-end sales edged up just 0.1%.  Overall sales at the Retail Pharmacy USA division were up 3.7% to $21.2bn, while its Retail Pharmacy International division reported a 2.3% drop to $3.2bn (+3.4% constant-currency).  Finally, the Pharmaceutical Wholesale division saw sales edge up 0.7% to $5.7bn (+6.3% constant-currency).

The group said its acquisition of Rite Aid is on track to be completed later this year, but warned that it is preparing for a long period of volatility due to the ‘Brexit’ vote. Any depreciation of the pound would hurt the group’s Boots arm in the near term.

However, WBA raised the lower end of its fiscal 2016 profit forecast, and now expects $4.45-$4.55 per share, compared to $4.35-$4.55 per share earlier.