Walgreens Boots Alliance reports USD 39B sales in Q3 FY25

USA – Walgreens Boots Alliance, Inc. has announced its fiscal third-quarter results, reporting net sales of USD 39.0 billion, marking a 7.2% increase year-over-year.

Walgreens posted a net loss of USD 175 million, reversing the USD 344 million in net earnings from the same quarter last year. 

The decline primarily reflected the absence of prior-year gains from divestments related to Cencora, combined with elevated tax expenses.

Operating income declined to USD 53 million, primarily due to a non-cash impairment charge on long-lived assets.

 Adjusted operating income decreased to USD 558 million from USD 613 million in the third quarter of fiscal 2024.

The adjusted earnings per share came in at USD 0.38, above the analyst consensus but down from USD 0.63 a year earlier.

Chief Executive Officer Tim Wentworth stressed a measured approach to financial stewardship, emphasizing the need to balance cost discipline with long-term investment. 

He stated, “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.” 

The U.S. Healthcare business saw substantial improvement, narrowing its operating losses from USD 220 million to USD 64 million year-on-year, aided by ongoing cost-control measures. 

Meanwhile, the U.S. Retail Pharmacy segment delivered a 7.8% increase in sales to USD 30.7 billion. 

Cash flow from operations for the quarter was USD 584 million, down slightly from the prior year, reflecting USD 252 million in legal payments, primarily linked to ongoing opioid litigation. 

Free cash flow increased to USD 336 million.

Recently, Walgreens Boots Alliance (WBA) entered into a definitive agreement to be acquired by Sycamore Partners, a private equity firm specializing in retail, consumer, and distribution-related investments. 

The transaction, valued at up to USD 23.7 billion, includes USD 11.45 per share in cash and an additional potential value of up to USD 3.00 per share from the future monetization of WBA’s interests in VillageMD businesses.

This acquisition aims to leverage WBA’s healthcare expertise and Sycamore’s retail and consumer services leadership to accelerate WBA’s turnaround strategy. 

The company will continue to operate under its trusted Walgreens and Boots brands, maintaining its headquarters in the Chicago area. 

The agreement provides shareholders with premium cash value and the opportunity to create further value through the monetization of VillageMD businesses.

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