Strong demand for COVID-19 testing and vaccination aided Walgreens Boots Alliance Inc (Nasdaq: WBA) to report better-than-anticipated fiscal 2022 first-quarter results. The retail and wholesale drug business all reported impressive growth in all its business divisions. Also, WBA upwardly revised its FY 2022 adjusted earnings per share growth outlook. The stock closed at $52.44, down 2.89% or $1.56 from the prior close.
The Deerfield, Illinois-based company reported first-quarter sales of $33.90 billion, an increase of 7.80% from $31.44 billion in the similar quarter last year. Analysts polled by Thomson Reuters had anticipated the company to report sales of $32.74 billion.
For the quarter ended November 30, 2021, the company posted net earnings (continuing operations) of $3.580 billion, or $4.13 per share, compared with a net loss of $391 million (continuing operations), or $0.45 a share, in the quarter ended November 30, 2020.
Excluding transformational cost management, acquisition-related amortization, acquisition-related costs, and adjustments to equity earnings (loss) in AmerisourceBergen, among others, the 1Q 2022 adjusted earnings was $1.455 billion, or $1.68 per share, up from $1.052 billion, or $1.22 a share, in 1Q 2021. The Wall Street analysts anticipated the company to post adjusted earnings of $1.33 per share for the reported quarter.
Commenting on the quarterly results, WBA’s CEO Rosalind Brewer said, “First quarter results exceeded our expectations, with a very encouraging performance across all our business segments. I am particularly excited about the progress we’re making in building out Walgreens Health.”
Segment-wise,
- The United States revenues rose by 3.20% y-o-y to $28.0 billion. Comparable sales grew by 7.90% on a y-o-y basis.
- The International revenues were $5.80 billion, up 35.80% from last year. Specifically, Boots UK comparable pharmacy sales grew by 8.80% on a y-o-y basis, mirroring robust demand for pharmacy products. Also, Boots UK’s comparable retail sales rose by 16.30% from the prior-year period.
- As an outcome of the takeover of Shields on October 29, 2021, and VillageMD on November 24, 2021, Walgreens Health segment revenues were $51 million.
During Q1 2022, net cash provided by operating activities was $1.10 billion. Free cash flow was $645 million, down $118 million from the prior-year period.
Looking ahead, the company now anticipates FY 2022 adjusted earnings per share growth in low-single-digits, compared with flat growth forecast earlier. The upward revision will reflect 1Q 2022 results and ongoing positive momentum.
The quarterly beat and upward revision of adjusted earnings per share growth outlook are expected to trigger a fresh round of buying in the days ahead.
The historical price chart indicates that the stock of WBA has firm support at 46 levels. Additionally, the MACD indicator is in the positive zone. Therefore, we are expecting the stock to begin a new uptrend in the days ahead.
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