Research Desk Line-up: China Jo-Jo Drugstores Post Earnings Coverage
LONDON, UK / ACCESSWIRE / July 11, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Walgreens Boots Alliance, Inc. (NYSE: WBA), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=WBA, following the Company's release of its financial results for its third quarter fiscal 2017 on June 29, 2017. The largest US drugstore chain outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Drug Stores industry. Pro-TD has currently selected China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD) for due-diligence and potential coverage as the Company announced on June 29, 2017, its financial results for Q4 FY17 and FY17 which ended on March 31, 2017. Register for a free membership today, and be among the early birds that get access to our report on China Jo-Jo Drugstores when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on WBA; also brushing on CJJD. With the links below you can directly download the report of your stock of interest-free of charge at:
For the third quarter of fiscal 2017 which ended on May 31, 2017, Walgreens' sales increased 2.1% to $30.12 billion compared to sales of $29.50 billion in Q3 FY16. The Company's net sales increased 5.0% on a constant currency basis and surpassed analysts' expectations of $29.68 billion.
For Q3 FY17, Walgreens' GAAP operating income in the third quarter was $1.5 billion, reflecting a drop of 1.0% on a y-o-y basis. The Company's adjusted operating income in the reported quarter was $1.9 billion, an increase of 5.5% compared to the year-ago same period, and an increase of 7.5% on a constant currency basis.
During Q3 FY17, GAAP net earnings attributable to Walgreens Boots Alliance increased 5.3% to $1.16 billion compared with $1.10 billion in Q3 FY16, while GAAP diluted net earnings per share increased 5.9% to $1.07 compared with $1.01 per diluted share in the prior year's same quarter. In Q3 FY17, adjusted net earnings attributable to Walgreens Boots Alliance increased 11.9% to $1.4 billion, up 13.6% on a constant currency basis, while adjusted diluted net earnings per share for the reported quarter increased 12.7% to $1.33, up 14.4% on a constant currency basis.
Business Division Results
During Q3 FY17 Walgreens' Retail Pharmacy USA reported sales of $22.5 billion, reflecting an increase of 6.3% compared to Q3 FY16. Sales in comparable stores increased 3.7% on a y-o-y basis.
For Q3 FY17, Pharmacy sales, which accounted for 69.9% of the division's sales, grew 10.3% on a y-o-y basis, primarily attributable to higher prescription volumes including mail and central specialty following the formation of AllianceRx Walgreens Prime. The division filled 255.2 million prescriptions (including immunizations) adjusted to 30-day equivalents in the reported quarter, an increase of 8.5% on a y-o-y basis. Prescriptions filled in comparable stores increased 8.3% compared with Q3 FY16, primarily due to Medicare Part D growth and volume growth from previously announced strategic pharmacy partnerships.
During Q3 FY17, the segment's GAAP gross profit decreased 1.7% on a y-o-y basis, while adjusted gross profit fell 0.5%. In the reported quarter, selling, general, and administrative expenses (SG&A) as a percentage of sales decreased 1.6% on a y-o-y basis, primarily due to sales mix and higher sales. Retail Pharmacy USA's GAAP operating income in Q3 FY17 increased 0.1% on a y-o-y basis to $1.2 billion. The segment's adjusted operating income in the reported quarter increased 5.9% to $1.5 billion.
Walgreens' Retail Pharmacy International reported sales of $2.8 billion in Q3 FY17, a decrease of 10.3% compared to the year-ago corresponding period mainly due to currency translation. The segment's sales dropped 0.2% on a constant currency basis. For Q3 FY17, the division's comparable store sales increased 0.2% on a y-o-y basis, while comparable pharmacy sales decreased 0.1% on a constant currency basis, primarily due to the negative impact of pharmacy funding in the UK.
During Q3 FY17, Walgreens' Retail Pharmacy International GAAP gross profit decreased 11.6% on a y-o-y basis, primarily due to currency translation. On a constant currency basis, adjusted gross profit decreased 1.2%. The segment's GAAP operating income in Q3 FY17 fell 36.3% to $142 million, while adjusted operating income dropped 25.2% to $193 million, down 14.0% on a constant currency basis.
In Q3 FY17, Walgreens' Pharmaceutical Wholesale Division had sales of $5.3 billion, a decrease of 7.9% on a y-o-y basis, mainly due to currency translation. On a constant currency basis, the segment's comparable sales increased 3.7%, which was ahead of the Company's estimates of market growth. The division's GAAP operating income in Q3 FY17 was $200 million, which included $84 million from the Company's equity earnings in AmerisourceBergen compared with $146 million in the year-ago same quarter. The segment's adjusted operating income increased 41.3% to $253 million, up 53.1% on a constant currency basis.
On 28 June 2017, Walgreens authorized a share repurchase program for up to $5 billion of the Company's shares prior to the program's expiration on August 31, 2018.
Walgreens' GAAP net cash provided by operating activities was $1.9 billion in Q3 FY17, and free cash flow was $1.6 billion. The Company's GAAP net cash provided by operating activities was $5.2 billion in the first nine months of fiscal 2017, and free cash flow was $4.3 billion.
Rite Aid Acquisition
On June 29, 2017, Walgreens also announced a new definitive agreement with Rite Aid Corporation under which Walgreens Boots Alliance will purchase 2,186 stores, three distribution centers, and related inventory from Rite Aid. The consideration for the transaction will be $5.175 billion in cash, the assumption by Walgreens of the related real estate leases and the grant of an option to Rite Aid, exercisable through May 2019 and subject to certain conditions.
The new agreement replaced the previous merger agreement with Rite Aid announced in October 2015 and amended in January 2017, and the agreement to divest certain Rite Aid stores to Fred's, Inc. announced in December 2016. Both of these agreements have been terminated. The initial closing of the new transaction is expected to occur within the next six months.
For FY17, Walgreens raised the lower end of its guidance by $0.08 per share and now anticipates adjusted diluted net earnings per share of $4.98 to $5.08.
On Monday, July 10, 2017, Walgreens Boots Alliance's stock closed the trading session at $77.16, marginally falling 0.40% from its previous closing price of $77.47. A total volume of 4.76 million shares was exchanged during the session. Shares of the Company have a PE ratio of 19.47 and have a dividend yield of 1.94%. The stock currently has a market cap of $83.55 billion.
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