US pharmacy Walgreens Boots Alliance (WBA) saw a 7.2% increase in sales to $39bn in the third quarter of fiscal 2025 (FY25), up 6.9% on a constant currency basis, driven by growth in the US Retail Pharmacy and International segments.
However, WBA CEO Tim Wentworth said that the US front-end sales “continued to see weakness”.
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Wentworth said: “We remain focused on our turnaround plan, which will require time, disciplined focus and a balanced approach to manage future cash needs with investments necessary to navigate an evolving pharmacy and retail environment.”
WBA is in the process of finalising a transaction exceeding $10bn with Sycamore Partners. This acquisition, made public in March, will be subject to a shareholder vote at a special meeting scheduled for 11 July to determine approval.
Upon completion, WBA will become a private company and will no longer be listed on the Nasdaq Stock Market.
Operating income dropped to $53m from $111m in the year-ago quarter, which includes a noncash impairment charge related to certain long-lived assets.
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By GlobalDataAdjusted operating income was $558m, down from $613m in the year-ago quarter, reflecting higher incentive accruals, lower US retail sales, and lower equity earnings in Cencora. These were partly offset by growth in US Healthcare and cost savings within US Retail Pharmacy.
The company experienced a net loss of $175m in the third quarter, a significant decrease from net earnings of $344m in the year-ago quarter. This is primarily due to prior year gains from fair value adjustments on derivatives and a partial sale of the company’s investment in Cencora, coupled with higher tax expenses in the current quarter.
Adjusted net earnings stood at $334m, a decrease of $211m compared to the previous year, down 39.3% on a constant currency basis.
During the first nine months of FY25, sales increased by 6.3% to $117.0bn, with operating loss at $5.8bn compared to a loss of $13.1bn in the year-ago period.
This included significant noncash impairment charges related to VillageMD goodwill and other assets. Adjusted operating income for the nine months was $1.9bn, reflecting lower US retail sales and higher incentive accruals, despite growth in US Healthcare.
Net loss for the first nine months was $3.3bn, a decrease of 41.5% from the previous year. Adjusted net earnings decreased by 38.8% to $1.3bn.
