Walgreens Q3 Earnings : How Did The Retail Division Perform?

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Walgreens Boots Alliance

Walgreens Boots Alliance (NASDAQ:WBA) announced its fiscal Q3 earnings on Wednesday, July 6th. The company’s revenue grew marginally by 2.4% year-on-year (y-o-y) to $29.5 billion for the quarter, while its earnings per share declined 14.4% y-o-y and was reported at $1.01.

Retail Pharmacy USA

The Retail pharmacy USA division reported revenues of $21.19 billion, a marginal increase of 3.7% over the quarter last year. The increase in revenue was primarily driven by an increase in prescriptions filled and an increase in the number of Medicare Part D prescriptions filed. The company filled 235 million prescriptions on a 30 day basis, an increase of 3.9% y-o-y. This increase led to growth in Walgreens total market share by 30 basis points to 19.6%. The division’s gross margins declined marginally to 26.45%, which was mainly attributed to lower third party reimbursements and changes in mix, partially offset by procuring efficiencies. At the end of the quarter, the store count for the company stood at 8208.

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Retail Pharmacy International

The Retail Pharmacy International division reported revenues of $3.19 billion, which were 2.3% lower than the revenue reported in Q3 FY’15. The reduction in the reported revenue was primarily attributed to negative exchange rates for the company. On a constant currency basis, sales increased 3.2% y-o-y. Retail sales increased marginally in Ireland and Thailand, but were lower in Chile – due to the loss of contracts – and in the United Kingdom – primarily due to reduced government funding compared to the previous year. The division’s operating income increased 8.8% y-o-y to $223 million, primarily driven by lower SG&A expenses.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com.
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our analysis for Walgreens

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