Walgreens (WBA) posted better-than-expected fourth quarter earnings Thursday, while lifting its healthcare sales target, sending shares in the drugstore chain sharply higher in pre-market trading.
Walgreens Boots said adjusted earnings for the three months ending in August, the company's fiscal fourth quarter, came in at 80 cents per share, down 31.6% from the same period last year but 3 cents ahead of the Street consensus forecast. Group revenues, Walgreens said, fell 5.3% from last year to $32.4 billion, again topping analysts' forecasts of a $32.085 billion tally, as U.S. same-store sales rose 1.6%.
Looking into the current fiscal year, Walgreens said it sees adjusted earnings in the region of $4.45 to $4.65 per share, essentially meeting the mid-point of Street forecasts, but noted that healthcare sales will likely improve to between $11 billion and $12 billion.
"WBA has delivered ahead of expectations in the first year of our transformation to a consumer-centric healthcare company," said CEO Rosalind Brewer. "Our resilient business achieved growth while navigating macroeconomic headwinds. Fiscal 2023 will be a year of accelerating core growth and rapidly scaling our U.S. Healthcare business."
"Our execution to date provides us visibility and confidence to increase the long-term outlook for our next growth engine and reconfirm our path to low-teens adjusted EPS growth," she added. "Our strategic actions are unlocking sustainable shareholder value as we simplify the company and continue our journey to being a healthcare leader."
Walgreens shares, a Dow component, were marked 3.1% higher in early trading following the earnings release to change hands at $32.84 each.
Walgreens also noted that comparable sales at Boots, its U.K.-based division, rose 15.2% from last year, even amid a 6.9% slump in overall pharmacy revenues.
Walgreens said earlier this week that it had held a number of "productive discussions" in terms of the sale, but noted that "as a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value" of either Boots nor the No7 Beauty company.
The 173-year old Boots, whose 2,200 stores are a mainstay on British high streets, was taken in by Walgreens in 2014 for around £9 billion, but effectively put on the block earlier this year when the group unveiled plans for a strategic review of its U.K. business.
