Walgreens Boots Alliance (NASDAQ:WBA) experienced a dip in shares during Thursday's premarket trading following Q4 FY23 earnings that fell short of expectations. The company reported disappointing adjusted earnings with a loss of $0.67 per share, marking a YoY decline of approximately 16%. This comes despite reporting Q4 sales of $35.4 billion, a roughly 9% YoY growth, exceeding predictions.
The U.S. Retail Pharmacy segment contributed significantly to the quarter's revenue, adding around $27.7 billion, spurred by comparable sales growth of approximately 6% YoY. The company's healthcare ventures, including the acquisitions of CareCentrix and Summit Health, propelled the U.S. Healthcare segment by $2.0 billion in Q4 FY23, reflecting 19% pro forma growth.
For FY24, Walgreens projects its adjusted earnings per share to be between $3.20 and $3.50, below the consensus of $3.71. This is attributed to reduced COVID-19 contributions among other factors. However, the company anticipates FY24 sales to meet the consensus of $144.4 billion at a range of $141.0 billion to $145.0 billion.
The U.S. Healthcare segment is expected to break even in FY24 adjusted EBITDA following guidance set at -$50 million to $50 million. This reflects Walgreens' focus on accelerating profitability.
Earlier on Thursday, before releasing its earnings report, Walgreens saw a minor increase in pre-market trading shares. The full-year profit forecast for FY23 had been cut due to a decrease in demand for COVID-related services, a cautious consumer environment, and a weaker respiratory season that negatively impacted profit margins.
The adjusted earnings for the quarter ending in August were expected to see a 13.7% YoY decline to 69 cents per share, while group revenues were projected to grow by 6.7% to $34.62 billion. The company had revised its initial forecast for fiscal year 2023's adjusted earnings to between $4.00 and $4.05 per share from the earlier range of $4.45 to $4.65 per share.
Walgreens will commence fiscal year 2024 under the leadership of new CEO Tim Wentworth, who took over from interim CEO Ginger Graham.
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