Earnings Season| WBA good top line 3Q, but poor overall, lowers FY guidance

DividendWave
2023-06-28

WBA $Walgreens Boots Alliance(WBA)$ good top line 3Q, but poor overall, lowers FY guidance

3Q YoY

Revenue +8.6%

Net Income -59%

Dil EPS -58% (Adj +3.3%)

first 9M

OCF -68%

FCF negative

FY23 guide

Adj EPS of $4.00 to $4.05 from $4.45 to $4.65 due to

"consumer & macroeconomic conditions"

A lot of WBA investment case is around the new (since FY22) U.S. Healthcare segment and how it can deliver profitability

Most acquisitions and investments (Shields, VillageMd, CareCentrix) are in this segment

It´s growing quicker, but burning more than guided.

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WBA this FY23 guidance slide (Oct vs June) tells the story

• US retail Pharmacy (80% of revenue)

growing faster

but margins eroding quicker

• International (15%)

Good improvement

• U.S. Healthcare (5%)

Growing 30% + guided

Burning 40%+ than guided

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WBA For now, the combined business is going lower than guided, so the confidence for the thereafter seems to have shaken "the markets"

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