Key Takeaways From Walgreens Q4 FY’18 Earnings
Key trends from Walgreens’ fourth quarter earnings are outlined below:
Walgreens’ Business Receives A Major Boost From the recent Acquisition of Rite Aid stores – The recent acquisition of stores from Rite Aid has provided a major boost to Walgreens’ business in Q4. The combination provides consumers with a more integrated experience, reduced costs, and improved access to health care experts in homes. This has combined Walgreens’ dense local presence through pharmacies and Rite Aid’s health care benefits and services.
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Retail USA Pharmacy segments and Pharmaceutical Wholesale segments continue to perform well – For Retail USA and Retail International Pharmacy segment, the company had decent revenue growth of 14.7%, but it declined by 2.7% internationally. In this quarter this was primarily due to higher prescription volume including central specialty and mail following the acquisition of Rite Aid stores, but declined slightly Internationally due to unfavorable currency translation. The growth for USA in this segment has continued to follow an upward trend driven by solid same store script growth as a result of partnerships established with Rite Aid. Increased participation as a pharmacy in Medicare Part D networks has also boosted results.
In its Pharmaceutical Wholesale Services segment, Walgreens grew 4.7% y-o-y in Q4. Certain factors that have aided growth in this segment include network claims, brand inflation, and growth in specialty pharmacy. This segment saw strong performance in emerging markets and the UK.
Growth in Online Sales – The company’s efforts to boost its digital capabilities have started paying off. In this regard, more than 22.5% of all 4Q retail refill scripts were initiated via the digital channel with the Walgreens mobile app, having been downloaded in excess of 50 million times since the launch.
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