Walgreens Boots Alliance Inc (NASDAQ: WBA) posted mixed result for the fourth quarter 2018. Net income for the company rose 89% to $1.51 billion. The company is engaged in several deals and partnerships with the aim of expanding its pharmacy business to become a “health-care destination” for health, beauty and personal care
WBA in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.48, beating the analysts’ estimates for the adjusted earnings per share of $1.45. The company had reported the adjusted revenue growth of 11 percent to $33.44 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $33.78 billion. U.S. pharmacy sales rose 17% from the year-earlier quarter while prescriptions filled in comparable stores increased 1.3%. The growth in prescription volumes helped lift pharmacy sales in its latest quarter, as the company’s integration of Rite Aid stores expanded its foothold in the U.S. prescription market. Walgreens’s share of the U.S. retail prescription market this year has grown to a company record 21.7%, compared with 20.2% in 2017. For the fourth quarter, Walgreens said it had filled the largest number of prescriptions in its 117-year history, largely because of its retention of many Rite Aid prescription-drug customers after taking over those stores. Walgreens closed a $4.4 billion deal earlier this year to buy more than 1,900 pharmacies from Rite Aid Corp.
Moreover, total pharmacy sales advanced 16.7% in the fourth quarter and 17.2% for the year, mainly reflecting Rite Aid and organic growth of 6.5%. Our Central Specialty business led the way and delivered full year growth of 80%. Fourth quarter market share was 22.4%, up 180 basis points compared to last year. Comparable pharmacy sales and prescriptions improved sequentially compared to the third quarter and included the benefit from the transfer of prescriptions from our Rite Aid stores. Pharmacy gross profit was slightly lower in the fourth quarter, entirely due to timing. And full year gross profit increased mid-single-digits versus prior year. The fourth quarter gross margin reflected the continued shift to specialty, which accounted for around 190 basis points and reimbursement pressure, which was in part due to unfavorable timing. These factors were partially offset by procurement savings. Retail sales increased 8.3% in the quarter and 2.4% in the year, with the fourth quarter reflecting an increased sales contribution from the acquired Rite Aid stores. Comp retail sales declined 1.9% in the quarter and 2.4% in the year. The fourth quarter comp improved sequentially compared to the third quarter decline of 3.8%.