Walgreens Crushes Sales Forecast, But Deeper Retail Troubles Lurk Beneath

Walgreens Boots Alliance Inc (NASDAQ: WBA) on Thursday reported third-quarter sales of $38.99 billion, up 7.2% year over year (+6.9% on constant currency), beating the consensus of $36.84 billion, reflecting sales growth in the U.S. Retail Pharmacy and International segments.

Adjusted operating income was $558 million compared to $613 million in the year-ago quarter, reflecting higher incentive accruals, lower U.S. retail sales, and lower equity earnings in Cencora, partly offset by growth in U.S. Healthcare and cost savings within U.S. Retail Pharmacy.

Adjusted EPS was 38 cents, down from 63 cents a year ago, beating the consensus of 34 cents, according to data from Benzinga Pro.

CEO Tim Wentworth, said, "Third quarter results reflect continued improvement in our U.S. Healthcare segment and benefits from our cost savings initiatives, while we continued to see weakness in our U.S. front-end sales. 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."

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The U.S. Retail Pharmacy segment sales reached $30.7 billion, up 7.8%. Comparable sales increased 10.3%.

Pharmacy sales increased 11.8%, and comparable pharmacy sales increased 14.6% in the quarter, each benefiting from higher branded drug inflation and mix impacts.

Comparable prescriptions increased by 2.7%, and prescriptions excluding immunizations increased by 2.7% compared to a year ago.

Total prescriptions filled in the quarter, including immunizations, increased 0.4% to 308 million.

Retail sales decreased 5.3%, including the impact of the Footprint Optimization Program and lower comparable retail sales. Comparable retail sales decreased 2.4% and were impacted by weaker sales in grocery and household, health and wellness, and beauty.

The U.S. Healthcare segment reported third-quarter sales of $2.1 billion, a decrease of $23 million, primarily driven by a 6.5% decrease in VillageMD sales, reflecting lower risk-based and fee-for-service revenue, including the impact of clinic closures. CareCentrix sales increased 11.6%, and Shields sales increased 24.8%.

Guidance: Walgreens Boots Alliance withdrew its 2025 guidance as part of the M&A deal with Sycamore Partners. The merger is expected to close in the fourth quarter of calendar year 2025.

Price Action: WBA stock is up 0.62% at $11.38 during the premarket session at the last check on Thursday.

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