Walgreens Boots Alliance, Inc. (Nasdaq: WBA) announced financial results for the third quarter of fiscal 2025, which ended May 31, 2025.
✅Third quarter loss per share1 was $0.20 compared to earnings per share of $0.40 in the year-ago quarter. The decline in earnings per share was primarily driven by prior year after-tax gains related to fair value adjustments on variable prepaid forward derivatives and a partial sale of the Company’s equity method investment in Cencora, and higher tax expense in the current quarter.
✅Adjusted earnings per share (EPS) was $0.38 compared to adjusted EPS2 of $0.63 in the year-ago quarter. The decline in adjusted EPS was primarily driven by a higher adjusted effective tax rate , higher incentive accruals, lower U.S. retail sales and lower equity earnings in Cencora, partly offset by cost savings within U.S. Retail Pharmacy.

✅Third quarter sales increased 7.2 percent year-over-year to $39.0 billion, up 6.9 percent on a constant currency basis.
✅WBA third quarter sales increased 7.2 percent from the year-ago quarter to $39.0 billion, an increase of 6.9 percent on a constant currency basis, reflecting sales growth in the U.S. Retail Pharmacy and International segments.
✅Third quarter operating income was $53 million compared to an operating income of $111 million in the year-ago quarter. Third quarter operating income included a non-cash impairment charge related to certain long-lived assets.
✅Adjusted operating income was $558 million compared to adjusted operating income2 of $613 million in the year-ago quarter. Operating income and adjusted operating income2 reflect higher incentive accruals, lower U.S. retail sales and lower equity earnings in Cencora, partly offset by growth in U.S. Healthcare and cost savings within U.S. Retail Pharmacy.
✅Net loss in the third quarter was $175 million, a decrease of $519 million compared to net earnings of $344 million in the year-ago quarter. The decline in net earnings was primarily driven by prior year after-tax gains related to fair value adjustments on variable prepaid forward derivatives and a partial sale of the Company’s equity method investment in Cencora, and higher tax expense in the current quarter.

✅Adjusted net earnings in the third quarter was $334 million, a decrease of $211 million compared to adjusted net earnings of $545 million in the year-ago quarter, down 39.3 percent on a constant currency basis. The decline in adjusted net earnings reflects a higher adjusted effective tax rate , higher incentive accruals, lower U.S. retail sales and lower equity earnings in Cencora, partly offset by cost savings within U.S. Retail Pharmacy.
✅Loss per share in the third quarter was $0.20 compared to earnings per share of $0.40 in the year-ago quarter. Adjusted EPS was $0.38 compared to adjusted EPS of $0.63 in the year-ago quarter, reflecting a decrease of 39.6 percent on a constant currency basis.
✅Net cash provided by operating activities was $584 million in the third quarter, a $20 million decrease compared with the year-ago quarter. Operating cash flow in the current quarter was negatively impacted by $252 million of legal payments primarily related to opioid-related settlements. Free cash flow was positive $336 million, a $2 million improvement compared to the year-ago quarter. Operating cash flow and free cash flow reflect improvements in working capital, lower cash taxes and lower interest paid, partly offset by higher legal payments.

Overview of Fiscal 2025 Year-to-Date Results

✅Sales in the first nine months of fiscal 2025 increased 6.3 percent from the year-ago period to $117.0 billion, an increase of 6.2 percent on a constant currency basis, primarily reflecting sales growth in the U.S. Retail Pharmacy and International segments.
✅Operating loss in the first nine months of fiscal 2025 was $5.8 billion compared to an operating loss of $13.1 billion in the year-ago period. Operating loss in the current period included a $3.0 billion non-cash impairment charge related to VillageMD goodwill and other long-lived assets, which resulted in a $1.9 billion charge attributable to WBA, net of tax and non-controlling interest, and a $2.4 billion non-cash impairment charge attributable to WBA, net of tax, primarily related to U.S. Retail Pharmacy goodwill. ✅Operating loss in the year-ago period included a $12.4 billion non-cash impairment charge related to VillageMD goodwill, which resulted in a $5.8 billion charge attributable to WBA, net of tax and non-controlling interest, and a $455 million non-cash impairment charge related to certain long-lived assets in the U.S. Retail Pharmacy segment.
✅Adjusted operating income was $1.9 billion, compared to adjusted operating income of $2.2 billion in the year-ago period, reflecting lower U.S. retail sales, sale-leaseback gains in the prior year period and higher incentive accruals, partially offset by growth in the U.S. Healthcare segment and cost savings within the U.S. Retail Pharmacy segment.
✅Net loss for the first nine months of fiscal 2025 was $3.3 billion, a decrease of 41.5 percent compared to a net loss of $5.6 billion in the year-ago period, reflecting non-cash impairment charges and fair value adjustments on variable prepaid forward derivatives, partly offset by $1.3 billion in after-tax gains on settlements of variable prepaid forward derivatives related to the monetization of Cencora shares and gains on investments in BrightSpring.
✅Adjusted net earnings decreased 38.8 percent to $1.3 billion, down 38.8 percent on a constant currency basis, reflecting an adjusted effective tax benefit in the year-ago period due to the recognition of deferred tax assets in foreign jurisdictions and lower adjusted operating income in the current period.
✅Loss per share in the first nine months was $3.81 compared to loss per share of $6.53 in the year-ago period, a decrease of 41.6 percent. Adjusted EPS was $1.52 compared to adjusted EPS of $2.49 in the year-ago period, reflecting a decrease of 39.0 percent on a constant currency basis.

✅Net cash provided by operating activities was $245 million in the first nine months of fiscal 2025, a $559 million improvement compared with the year-ago period. Operating cash flow in the current period was negatively impacted by $1.4 billion of legal payments primarily related to Everly and opioid-related settlements. In the year-ago period, operating cash flow was negatively impacted by $785 million in payments related to legal matters and a $386 million Boots Pension Plan Annuity premium. Free cash flow was negative $506 million, a $557 million improvement compared with the year-ago period. Operating cash flow and free cash flow2 reflect improvements in working capital, lower cash taxes and lower interest paid, partly offset by higher legal payments. Free cash flow also benefited from a $384 million decrease in capital expenditures