Walgreens Boots Alliance, Inc. (NASDAQ: WBA) surges 1.49% to trade at $33.76 in early trading session on Monday as released its financial results for the fiscal year and fourth quarter that concluded on August 31, 2022.
Chief Executive Officer Rosalind Brewer stated that WBA outperformed expectations in the first year of their transformation to a consumer-centric healthcare organization. While overcoming macroeconomic difficulties, their robust company achieved growth. Fiscal 2023 will be a year of fast core development and expansion of their U.S. Healthcare business. Their performance to far have given them the clarity and confidence they need to raise their long-term expectation for their next growth engine and reaffirm their path to low-teens adjusted EPS growth. As they streamline the organization and continue on their path to being a healthcare leader, their strategic efforts are generating long-term shareholder value.
WBA’s fourth-quarter revenues from continuing operations fell 5.3 percent year on year to $32.4 billion, a 3.2 percent fall in constant currency terms. Sales gains at Walgreens and in the International business, as well as sales contributions from the U.S. Healthcare sector, were more than offset by a 660 basis point effect from AllianceRx Walgreens’ sales reduction.
The fourth-quarter operating loss from continuing operations was $822 million, compared to $910 million in the previous quarter. The operating loss for the quarter represents a non-cash impairment charge of $783 million relating to intangible assets in Boots UK, as well as additional expenditures associated to the Transformational Cost Management Program. Adjusted operating income from continuing operations was $744 million, a 38.2 percent decrease in constant currency terms, reflecting lower U.S. pharmacy operating results as it lapped higher volumes of prior year COVID-19 vaccinations, as well as growth investments in U.S. Healthcare, which were partially offset by improved retail contributions in both the U.S. Retail Pharmacy and International segments.
In the fourth quarter, net cash provided by operating activities was $85 million, and free cash flow was $(407) million, a $1.3 billion decrease from the previous quarter, primarily due to lower operating income, pre-buy of seasonal inventory, U.S. legal settlements, and increased capital expenditures in growth initiatives, partially offset by working capital timing benefits.
