For the fourth quarter of fiscal 2022, Walgreens Boots Alliance, Inc. (WBA Stock) reported adjusted earnings per share (EPS) from continuing operations of 80 cents, down 31.6% from the prior-year period (down 30% at constant currency rate or CER). But the number was 2.6% higher than the Zacks Consensus Estimate.
In contrast to the prior year’s quarter’s earnings of 41 cents per share, the fourth quarter of fiscal 2022’s GAAP loss from continuing operations was 48 cents.
Adjusted EPS from continuing operations for the entire year was $5.04, up 2.5% from fiscal 2021 (up 3.4% at CER). This came in 0.4% higher than Zacks Consensus Estimate.
For the fiscal fourth quarter, Walgreens Boots reported overall sales of $32.45 billion, a decline of 5.3% from the previous year and 3.2% at CER. The top line slightly below the Zacks Consensus Estimate by 0.1%.
The total revenue for the fiscal year 2022 was $132.70 billion, an increase of 0.1% over the prior year. This nominally outperformed the Zacks Consensus Estimate by 0.03% as well.
Quarterly Information
At the beginning of the fiscal year, the firm separated its operations into three reportable segments: the United States, International, and Walgreens Health. Walgreens Boots said that it has altered the names of two reportable segments to better reflect its business operations, organizational structure, and strategy during the fiscal Q4 statement. The Walgreens Health business has been renamed to U.S. Healthcare, while the United States section has changed to U.S. Retail Pharmacy.
American Retail Pharmacy
Sales for the business reached $26.68 billion for the fiscal fourth quarter, a 7.2% year over year fall. Comparable sales improved 1.6% compared to the prior quarter. A 10 basis point (bps) headwind from the AllianceRx Walgreens business contributed to a decrease in pharmacy sales of 8.8% from the corresponding period last year.
Comparable retail sales decreased 1.9% year over year, while overall retail sales dropped 2.4%. Comparable retail sales down 1.1% from the same quarter last year (tobacco and e-cigarettes excluded).
International
For the fiscal fourth quarter, revenue at the International division increased 6.6% year over year, while revenue at CER increased 6.7%, reaching $5.14 billion.
Sales at Boots UK increased 6% year over year. In the last quarter of the fiscal year, wholesale company sales in Germany climbed by 6.8%.
Boots UK had a 15.2% growth in comparable retail sales, led by improvements in market share in the personal care and health & wellness sectors.
However, the reduced demand for COVID-19 services was the main factor in Boots UK comparative pharmacy sales down 6.9% year over year.
American healthcare
US Healthcare reported $622 million in sales for the fourth quarter of the fiscal year. On a pro forma basis, this increased by 34% from the combined result of the previous quarter.
On a pro forma basis, the Shields business increased 48% within the division compared to their independent performance in the prior quarter. Important contract wins, ongoing relationship expansion, and a laser-like focus on execution were the primary drivers of the gain. As a result of the growth and expansion of existing clinics, VillageMD expanded by 31%.
Margins
The reporting quarter’s gross profit decreased 14.6% year over year to $6.41 billion. To 19.8%, gross margin shrank by 214.2 basis points.
Selling, general, and administrative costs increased 10.1% to $7.32 billion from the previous year.
Compared to an operational profit of $854 million in the same quarter last year, the business recorded an adjusted operating loss of $909 million for the under review quarter.
Walgreens Boots ended fiscal 2022 with $1.36 billion in cash and cash equivalents, compared to $559 million in fiscal 2021. At the end of the fiscal year, the total debt increased from $8.98 billion at the end of fiscal 2021 to $11.67 billion.
At the end of fiscal 2022, net cash supplied by operating operations was $3.89 billion, a decrease from the $5.55 billion provided during the same time in 2017.
A five-year annualized dividend growth rate for the corporation is 3.75%.
WBA Stock Projection
The business set its full-year adjusted EPS outlook for fiscal 2023 in the $4.45 to $4.65 range. The current $4.57 Zacks Consensus Estimate has been set.
Walgreens Boots finished the fourth quarter of fiscal 2022 with higher earnings than anticipated. On a year-over-year basis, profits, however, considerably decreased. The bottom line was hurt by lower COVID-19 immunization volumes in the reporting quarter, macroeconomic challenges, and higher costs. The projected sales fall at AllianceRx Walgreens had a significant impact on fourth-quarter revenues, which also fell short of the Zacks Consensus Estimate and decreased year over year by 660 basis points.
Based on the sustained upturn in the Boots UK business as well as development in the company’s German wholesale business, the company’s international sector reported solid growth.
However, Walgreens Boots increased the U.S. Healthcare fiscal 2025 sales forecast from an earlier range of $9 billion to $10 billion to a band of $11 billion to $12 billion. The business reiterated its forecast for adjusted EPS growth in the low-teens in fiscal 2025.
Upcoming Releases according to Zacks
Currently, Walgreens has a Zacks Rank of #4. (Sell).
On Nov. 2, Charles River Laboratories International CRL will announce its third-quarter 2022 financial results.
The historical long-term profits growth rate for Charles River is 17.7%. Charles River’s earnings yield of 5.47% outperforms the sector’s -2.84% in a favorable comparison.
Results for the third quarter of 2022 will be released by McKesson MCK on November 1.
The predicted 14.2% long-term historical profits growth rate for McKesson. MCK’s earnings yield of 6.94% is superior to the sector’s 5.22% in that regard.
Results for the third quarter of 2022 will be announced by Humana HUM on November 2.
The historical long-term profits growth rate for Humana is predicted to be 16.2%. HUM’s earnings yield of 5.02% is higher than the sector average of 5.00%.
Featured Image- Unsplash @ Sachina Hobo
Author Valerie Remorosa 
