Sales Performance - Sales for the three months ended May 31, 2025 increased 7.8% to $6.2 billion, with a favorable impact of currency translation of 1.9 percentage points [274]. - For the nine months ended May 31, 2025, sales increased 6.1% to $18.7 billion, with a constant currency increase of 5.5% [285]. - Pharmacy sales increased 4.6% in the same period, with comparable pharmacy sales in constant currency rising 5.8% [275]. - Retail sales grew 7.4%, driven by strong performance in Boots UK, with Boots.com sales increasing 18.7% [276]. - Pharmacy sales decreased 1.3% for the nine months, but comparable pharmacy sales in constant currency increased 5.8% [286]. - Retail sales for the nine months increased 5.8%, with Boots.com sales growing 23.1% [287]. - The U.S. Healthcare segment reported sales of $2.1 billion for the three months ended May 31, 2025, with an adjusted operating income of $54 million [297]. - Sales for the three months ended May 31, 2025, decreased by $23 million to $2.1 billion, a decline of 1.1% year-over-year, primarily due to lower revenue at VillageMD [298]. - Sales for the nine months ended May 31, 2025, increased by $195 million to $6.4 billion, with CareCentrix sales up 11.3% and Shields sales up 28.1% [304]. Operating Income and Profitability - Operating income for the three months ended May 31, 2025 increased 31.1% to $188 million, favorably impacted by currency translation [282]. - Adjusted operating income for the same period rose 22.0% to $214 million, reflecting strong retail performance and market growth [283]. - Gross profit for the three months ended May 31, 2025, was $256 million, an increase of $75 million compared to the same quarter last year, reflecting higher contributions from VillageMD and Shields [299]. - Adjusted operating income for the nine months ended May 31, 2025, improved by $346 million to $196 million, supported by contributions from VillageMD and Shields [308]. - Adjusted EBITDA for the three months ended May 31, 2025, was $86 million, an increase of $63 million compared to the prior year, reflecting improvements at VillageMD and Shields [303]. - Adjusted EBITDA for the nine months ended May 31, 2025, was $314 million, an increase of $313 million compared to the previous year, indicating significant growth at VillageMD and Shields [309]. - The operating loss for the three months ended May 31, 2025, was $64 million, a decrease of $156 million from the prior year, reflecting lower acquisition-related amortization [301]. - The operating loss for the nine months ended May 31, 2025, was $3.7 billion, a decrease of $10.0 billion compared to the previous year, due to higher contributions from VillageMD and Shields [307]. Net Earnings and Losses - For the three months ended May 31, 2025, Walgreens Boots Alliance reported a net loss of $175 million compared to a net earnings of $344 million in the same period of 2024 [322]. - Adjusted net earnings attributable to Walgreens Boots Alliance for the three months ended May 31, 2025, were $334 million, down from $545 million in the same period of 2024, representing a decrease of approximately 38.6% [324]. - The diluted net loss per common share for the three months ended May 31, 2025, was $(0.20), compared to diluted net earnings per share of $0.40 in the same period of 2024 [324]. Cash Flow and Debt Management - The Company reported net cash provided by operating activities of $245 million for the nine months ended May 31, 2025, compared to a net cash used of $314 million for the same period in 2024, indicating a significant improvement [350]. - As of May 31, 2025, the Company had outstanding total debt of $7.4 billion, with $429 million classified as current, and approximately $1.8 billion and $846 million of this debt due in fiscal 2026 and 2027, respectively [341]. - The Company suspended its quarterly cash dividends to strengthen its balance sheet and improve free cash flow, focusing on debt reduction and capital allocation [332]. - The Company executed a sale of 1.3 million shares of Cencora for approximately $315 million, with proceeds used to pay down debt and for general corporate purposes [339]. - The Company entered into an accounts receivable securitization facility with an initial borrowing capacity of $2.5 billion to repay outstanding borrowings [342]. - The Company recorded pre-tax gains of $10 million and $135 million related to the change in classification of its previously held equity method investment in BrightSpring during the three and nine months ended May 31, 2025 [330]. - The Company continues to explore strategic monetization of non-core assets to provide additional liquidity, including VPF derivative contracts related to Cencora common stock [336]. - Net cash used for financing activities for the nine months ended May 31, 2025 was $2.8 billion, compared to $912 million in the prior year, with $25.0 billion in proceeds from debt [356]. - Total debt payments for the nine months ended May 31, 2025 amounted to $27.2 billion, an increase from $23.1 billion in the previous year, including significant repayments on various credit facilities [357]. Strategic Initiatives and Future Outlook - The Company continues to focus on strategic capital allocation and improving free cash flow amid ongoing financial challenges [359]. - The Company has accrued a total liability of $6.2 billion associated with the Multistate Settlement Agreement and other opioid-related claims, with $650 million and $5.5 billion classified in accrued expenses and other liabilities, respectively [345]. - The Company expects to make remaining contributions of approximately $450 million related to the Bulk Purchase Annuity Agreement by the end of fiscal 2026 [347]. - The Company recorded professional services and other transaction-related expenses of $15 million related to the merger agreement with Blazing Star Parent, LLC, during the three months ended May 31, 2025 [327]. - As of May 31, 2025, the Company's long-term credit ratings were Ba3 from Moody's and BB- from Standard & Poor's, with a negative outlook from S&P [364]. - The Company has repurchased $8.0 billion of its common stock under a program authorized for up to $10.0 billion, although repurchases were suspended in July 2020 [360]. - The Company received cash proceeds of $103 million from settling VPF derivative contracts through the delivery of 2.2 million shares of Cencora common stock in the nine months ended May 31, 2025 [358].

Financial Performance - Third quarter sales increased 7.2% year-over-year to $39.0 billion, with a 6.9% increase on a constant currency basis[6] - Third quarter loss per share was $0.20, compared to earnings per share of $0.40 in the year-ago quarter, reflecting a decline of 150%[7][11] - Adjusted earnings per share decreased to $0.38 from $0.63 in the year-ago quarter, a decline of 39.6% on a constant currency basis[7][11] - Net loss for the third quarter was $175 million, a decrease of $519 million compared to net earnings of $344 million in the year-ago quarter[9] - Adjusted operating income for the third quarter was $558 million, down from $613 million in the year-ago quarter, reflecting lower U.S. retail sales[8] - The company has withdrawn fiscal 2025 guidance due to the pending acquisition by entities affiliated with Sycamore Partners[4][31] - For the nine months ended May 31, 2025, the net loss was $4,836 million, a significant improvement from a net loss of $12,370 million in the same period of 2024, representing a reduction of approximately 61.0%[50] - Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. for the nine months ended May 31, 2025, were $1,317 million, down from $2,152 million in 2024, a decrease of approximately 38.8%[62] Sales and Revenue - U.S. Retail Pharmacy segment sales were $30.7 billion, up 7.8% year-over-year, with comparable sales increasing 10.3%[20] - International segment sales reached $6.2 billion, a 7.8% increase from the year-ago quarter, with a 5.9% increase on a constant currency basis[24] - U.S. Healthcare segment sales were $2.1 billion, a decrease of $23 million, primarily due to a 6.5% decline in VillageMD sales[27] - Sales for the three months ended May 31, 2025, were $38,986 million, an increase from $36,351 million in the same period of 2024, representing a growth of 4.5%[46] - Total sales for the three months ended May 31, 2025, were $30,715 million, compared to $28,503 million for the same period in 2024, representing a growth of approximately 7.6%[67] - The U.S. Retail Pharmacy segment's sales for the nine months ended May 31, 2025, were $91,961 million, compared to $86,308 million for the same period in 2024, showing an increase of about 6.1%[67] Cash Flow and Liquidity - Net cash provided by operating activities was $584 million, a $20 million decrease compared to the year-ago quarter[12] - Cash flows from operating activities provided $245 million, compared to a cash outflow of $314 million in the prior year, indicating a positive turnaround[50] - The company reported a net cash provided by investing activities of $260 million, down from $1,106 million in the previous year, reflecting a decrease of approximately 76.5%[50] - The net cash used for financing activities was $2,785 million, compared to $912 million in the prior year, indicating a significant increase in cash outflow[50] - The cash, cash equivalents, and restricted cash at the end of the period were $939 million, an increase from $740 million at the end of the previous year[50] - The company experienced a net decrease in cash, cash equivalents, and restricted cash of $2,280 million for the nine months ended May 31, 2025, compared to a decrease of $117 million in the prior year[50] Assets and Liabilities - Total assets decreased to $69,406 million as of May 31, 2025, down from $81,037 million as of August 31, 2024, reflecting a decline of 14.3%[47] - Current liabilities were $25,958 million as of May 31, 2025, compared to $26,953 million as of August 31, 2024, showing a decrease of 3.7%[47] - The company’s cash and cash equivalents decreased to $766 million as of May 31, 2025, from $1,319 million as of August 31, 2024, a decline of 42%[47] - The company’s long-term debt decreased to $6,937 million as of May 31, 2025, from $8,044 million as of August 31, 2024, a reduction of 13.8%[47] Impairments and Adjustments - The company reported an operating loss of $5,759 million for the nine months ended May 31, 2025, an improvement from a loss of $13,099 million in the same period of 2024[46] - The company recognized impairment of goodwill and intangibles amounting to $89 million for the three months ended May 31, 2025[68] - The company reported a total impairment of goodwill, intangibles, and long-lived assets of $5,432 million for the nine months ended May 31, 2025[68] - The company’s impairment of goodwill, intangibles, and long-lived assets for the nine months ended May 31, 2025, was $6,195 million, down from $13,091 million in 2024, indicating a reduction of approximately 52.7%[62] - The Company recorded professional services and other transaction-related expenses of $15 million and $50 million for the three and nine months ended May 31, 2025, related to the merger agreement with Blazing Star Parent, LLC[65] Employment and Operations - Walgreens Boots Alliance employs approximately 312,000 people across eight countries, maintaining a significant presence in the healthcare ecosystem[41]

Group 1 - Walgreens Boots Alliance, Inc. is set to release its third-quarter earnings results on June 26, with analysts expecting earnings of 34 cents per share, a decrease from 63 cents per share in the same period last year [1] - The company is projected to report quarterly revenue of $36.72 billion, slightly up from $36.35 billion a year earlier [1] - On April 21, Walgreens announced a $300 million settlement to resolve federal allegations regarding the filling of invalid prescriptions for opioids and other controlled substances [2] Group 2 - Deutsche Bank analyst downgraded Walgreens stock from Hold to Sell, reducing the price target from $11 to $9 [5] - Truist Securities maintained a Hold rating but lowered the price target from $13 to $12 [5] - UBS analyst maintained a Neutral rating and raised the price target from $9 to $10 [5] - Morgan Stanley maintained an Underweight rating and cut the price target from $9 to $7 [5]

Core Insights - Walgreens Boots Alliance (WBA) is expected to report quarterly earnings of $0.34 per share, a decline of 46% year-over-year, with revenues forecasted at $36.66 billion, reflecting a 0.9% increase compared to the previous year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating analysts have reevaluated their initial projections [1][2] Revenue Estimates - Analysts predict 'Revenues- U.S. Retail Pharmacy' to be $28.76 billion, showing a year-over-year change of +0.9% [4] - 'Revenues- U.S. Healthcare' is expected to reach $2.17 billion, indicating a +2.3% change year-over-year [4] - 'Revenues- International' is forecasted at $5.74 billion, suggesting a +0.2% change year-over-year [4] Operating Income Estimates - 'Adjusted operating income (loss)- U.S. Retail Pharmacy' is anticipated to be $113.67 million, down from $501 million year-over-year [5] - 'Adjusted operating income (loss)- International' is expected to be $196.39 million, compared to $175 million from the previous year [5] Stock Performance - Shares of Walgreens have increased by +1.3% over the past month, outperforming the +0.5% move of the Zacks S&P 500 composite [5] - With a Zacks Rank 2 (Buy), WBA is projected to outperform the overall market in the near future [5]

Core Insights - Rite Aid is undergoing bankruptcy proceedings, with various companies, including Walgreens and brand management firms, evaluating its remaining assets [1][4][9] - Kourtney Kardashian has shown interest in acquiring Rite Aid's Thrifty ice cream brand, which has a history dating back to 1940 [3][7] Group 1: Bankruptcy and Asset Evaluation - Rite Aid operates approximately 1,200 stores and serves around 8 million customers, having filed for bankruptcy for the second time in two years [4][8] - The bankruptcy judge has approved store closures and the sale of customer prescription files to 13 buyers, including CVS Health and Walgreens [4][10] - Brand management companies such as Authentic Brands Group, WHP Global, and Marquee Brands are assessing Rite Aid's intellectual property and loyalty program [1][2] Group 2: Interest in Thrifty Ice Cream Brand - Kourtney Kardashian, co-founder of Lemme and owner of Poosh, is interested in Rite Aid's Thrifty ice cream brand, which is sold at various retailers [3][5][6] - Thrifty ice cream has a notable history and has attracted interest from consumer-focused private equity firms as well [7]

Core Insights - Amazon Pharmacy is launching new features aimed at attracting seniors covered by Medicare's drug benefit, a market currently dominated by CVS Health and Walgreens [2][4] - The new "caregiver support feature" allows customers to have someone else manage their medications, enhancing convenience for those caring for elderly family members [3][8] - Customers with Medicare Part D can access PillPack, which simplifies medication management through pre-sorted and labeled packets delivered to their homes [4][6] Market Context - The U.S. prescription market is largely controlled by CVS and Walgreens, which together hold a 40% market share, while Amazon's share is less than 1% [6] - CVS filled 435 million prescriptions in Q1, a 4.3% increase year-over-year, while Walgreens filled over 309 million prescriptions, up 3.4% [5] - Combined, CVS and Walgreens generated over $370 billion in prescription revenues last year [5] Demographic Trends - The Medicare prescription market is expanding, with over 11,000 Americans turning 65 every day, indicating a growing customer base for Amazon Pharmacy [6] - More than 50 million Americans are currently caring for an aging family member, presenting a significant opportunity for Amazon to cater to this demographic [7]

Company Performance - Walgreens Boots Alliance (WBA) stock closed at $11.20, reflecting a -0.44% change compared to the previous day, underperforming the S&P 500 which gained 0.41% [1] - Over the past month, WBA shares appreciated by 2.46%, lagging behind the Retail-Wholesale sector's gain of 5.64% and the S&P 500's gain of 6.13% [1] Earnings Report Expectations - The upcoming earnings report for WBA is projected to show earnings of $0.34 per share, indicating a year-over-year decline of 46.03% [2] - Revenue is anticipated to be $36.66 billion, representing a 0.85% increase from the same quarter last year [2] Full Year Projections - For the full year, earnings are estimated at $1.66 per share, reflecting a -42.36% change from the previous year, while revenue is projected at $151.49 billion, showing a +2.59% change [3] Analyst Estimates and Stock Performance - Recent changes to analyst estimates for WBA suggest evolving short-term business trends, with positive revisions indicating optimism about the company's outlook [3] - The Zacks Rank system, which incorporates estimate changes, currently ranks WBA at 3 (Hold) [5] Valuation Metrics - WBA has a Forward P/E ratio of 6.77, which is a premium compared to its industry's Forward P/E of 5.43 [6] - The PEG ratio for WBA stands at 1.35, while the average PEG ratio for Retail - Pharmacies and Drug Stores stocks is 0.79 [7] Industry Context - The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector and holds a Zacks Industry Rank of 3, placing it in the top 2% of over 250 industries [8]

Core Viewpoint - Walgreens Boots Alliance Inc (WBA) has been experiencing stagnant stock performance, particularly following the announcement of a $10 billion deal to take the company private by Sycamore Partners, with the stock currently priced at $11.21 [1] Group 1: Stock Performance - WBA has been identified as the worst-performing stock in the S&P 500 Index for the month of June over the past decade, averaging a loss of 3.7% and finishing lower 80% of the time [2] - The average return for WBA in June is -3.69%, with a median return of -1.63%, and only 20% of the time has it posted a positive return [3] Group 2: Analyst Sentiment - Among the 15 analysts covering WBA, only two have a "buy" rating, while 11 maintain a "hold" rating, indicating potential for downgrades that could negatively impact the stock [4] - The current call/put volume ratio for WBA is 4.57, which is higher than 84% of readings from the past year, suggesting a high level of optimism in the options market [4] Group 3: Options Market - The Schaeffer's Volatility Index (SVI) for WBA is at 23%, ranking in the low 12th percentile of its annual range, indicating that options traders are expecting low volatility [5] - Historically, WBA has outperformed these low volatility expectations, as reflected in its Schaeffer's Volatility Scorecard (SVS) score of 81 out of 100 [5]

Core Viewpoint - The article discusses the uncertainty surrounding earnings forecasts for 2025 among S&P 500 companies due to fluctuating tariff policies and economic conditions, highlighting the number of companies that have provided or updated their earnings guidance during the Q1 earnings season [1]. Group 1: Earnings Forecasts - As of April 10, 2023, 23 S&P 500 companies reported their Q1 earnings, with 16 companies (70%) commenting on their earnings expectations for the current or next fiscal year [3]. - Among these 16 companies, 14 provided earnings forecasts for FY2025 (or FY2026), with 3 companies lowering their previous earnings guidance, 6 maintaining their forecasts, and 4 raising their expectations [3]. Group 2: Withdrawals and Uncertainties - Two companies, Walgreens Boots Alliance and Delta Air Lines, announced the withdrawal of their previously issued earnings guidance for FY2025, citing reasons related to upcoming merger transactions and economic uncertainties, respectively [4]. - Walgreens explained that the withdrawal was due to an impending acquisition by Sycamore Partners, while Delta stated that it would not reaffirm its earnings guidance until the economic situation becomes clearer [4]. - The market is closely monitoring whether more S&P 500 companies will withdraw their earnings guidance for 2025, recalling a similar trend during the COVID-19 pandemic [4].

Company Overview - Walgreens Boots Alliance, Inc. (WBA) has opened a new micro-fulfillment center (MFC) in Brooklyn Park, MN, aimed at streamlining prescription processing and enhancing personalized care for patients [1] - The MFC will support nearly 200 Walgreens stores across the Midwest, processing approximately 13 million prescriptions annually and creating over 175 jobs in the area [2] Operational Efficiency - Walgreens operates a network of 12 MFCs that support over 5,000 stores in the U.S., fulfilling more than 3.5 million prescriptions weekly, resulting in a 24% year-over-year increase in shipped volumes [3] - Approximately 40% of a store's total prescription volume is managed by MFCs, which also implemented a recycling program that recycled 3.7 million pounds of materials in fiscal 2024 [4] Industry Prospects - The retail pharmacy market is projected to reach $640 billion by 2033, growing at a compound annual growth rate of 3.5% from 2026 to 2033, driven by an aging population and increased demand for healthcare services [5] Financial Performance - Year-to-date, WBA's shares have increased by 19.8%, outperforming the industry's growth of 18.3% and the S&P 500's rise of 0.2% during the same period [6] Market Position - Walgreens currently holds a Zacks Rank of 3 (Hold), indicating a stable market position [7]