Upcoming AWS Coverage on GNC Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 13, 2017 / Active Wall St. announces its post-earnings coverage on Walgreens Boots Alliance, Inc. (NASDAQ: WBA). The Company reported its second quarter fiscal 2017 financial results on April 05, 2017. The largest US drugstore chain met earnings expectations. Register with us now for your free membership at:

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One of Walgreens Boots Alliance's competitors within the Drug Stores space, GNC Holdings, Inc. (NYSE: GNC), reports on February 16, 2017, its Q4 and full year 2016 results. AWS will be initiating a research report on GNC Holdings in the coming days.

Today, AWS is promoting its earnings coverage on WBA; touching on GNC. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

For the three months ended February 28, 2017, Walgreens sales were $29.4 billion, a decrease of 2.4 % on a y-o-y basis, and an increase of 0.9% on a constant currency basis. Excluding the impact of the leap year in 2016, sales increased 2.2% on a constant currency basis. The Company's results came in below market estimates of $30.56 billion.

For Q2 FY17, Walgreens' GAAP operating income was $1.5 billion, down 20.5% on a y-o-y basis, primarily due to costs related to the Company's cost transformation program. Adjusted operating income in the reported quarter was $2.0 billion, down 4.9% on a y-o-y basis.

For Q2 FY17, GAAP net earnings attributable to Walgreens increased 14.0% to $1.1 billion compared with the same quarter a year ago, while GAAP diluted net earnings per share increased 15.3% to $0.98. The increases in GAAP net earnings and GAAP net earnings per share primarily reflect the reduction in the fair value of the Company's AmerisourceBergen Corporation warrants in the year-ago same quarter, partially offset by higher costs related to the Company's cost transformation program in the quarter.

Adjusted Q2 FY17 net earnings attributable to Walgreens increased 3.7% to $1.5 billion, up 6.2% on a constant currency basis compared with the same quarter a year ago. Adjusted diluted net earnings per share for the quarter increased 3.8% to $1.36, up 6.1% on a constant currency basis compared with the same quarter a year ago. The Company's earnings results met market expectation of $1.36 per share.

Business Division Highlights

During Q2 FY17, Walgreens' Retail Pharmacy USA reported sales of $21.8 billion, up 1.5% on a y-o-y basis. Sales in comparable stores increased 2.4% in the year ago comparable period.

Pharmacy sales, which accounted for 66.5% of the division's sales in the reported quarter, increased 3.7% on a y-o-y basis. The division filled 246.7 million prescriptions (including immunizations) adjusted to 30-day equivalents in the reported quarter, up 5.9% on a y-o-y basis. Prescriptions filled in comparable stores increased 7.9% compared with the same quarter a year ago, primarily due to Medicare Part D growth and volume growth from previously announced strategic pharmacy partnerships.

For Q2 FY17, Walgreens' Retail Pharmacy International recorded net sales of $3.1 billion, down 14.5% on a y-o-y basis mainly due to currency translation. On a constant currency basis, comparable store sales decreased 0.9 % compared with the year-ago same quarter.

Pharmaceutical Wholesale had second quarter sales of $5.0 billion, down 10.6% on a y-o-y basis, mainly due to currency translation. GAAP operating income in the reported quarter was $165 million, which included $42 million from the Company's equity earnings in AmerisourceBergen, compared with $134 million in the year-ago comparable quarter. Adjusted operating income increased 45.8% to $226 million.

Balance Sheet

For Q2 FY17, Walgreens' GAAP net cash provided by operating activities was $2.9 billion, an increase of $504 million on a y-o-y basis, and free cash flow was $2.6 billion, an increase of $560 million compared to the year ago corresponding period.

Cost Transformation Program

Walgreens achieved $1.5 billion in savings from its previously announced cost transformation program ahead of schedule. The program is on track to be completed by the end of fiscal 2017. Accordingly, full program benefits will be recognized in subsequent periods. The Company now expects total pre-tax charges associated with this program to its GAAP financial results will be approximately $1.8 billion, consistent with the upper end of the expected range when the expanded program was announced in April 2015.

Rite Aid Acquisition

As announced on 30 January 2017, Walgreens and Rite Aid Corporation entered into an amendment and extension of their merger agreement, which was originally announced 27 October 2015. Walgreens continues to be actively engaged in discussions with the Federal Trade Commission (FTC) regarding the pending acquisition, and the extension of the end date of the agreement to 31 July 2017 allows the parties additional time to obtain regulatory approval.

Walgreens-Boots-Alliance continues to expect that it will realize synergies from the acquisition of Rite Aid in excess of $1 billion, to be fully realized within three to four years of the closing of the merger.

Share Repurchase Program

On 03 April 2017, Walgreens authorized a share repurchase program for up to $1 billion of its shares prior to the program's expiration on 31 December 2017.

Outlook

Walgreens maintained its guidance for fiscal 2017 and continues to expect adjusted diluted net earnings per share of $4.90 to $5.08.

Stock Performance

At the close of trading session on Wednesday, April 12, 2017, Walgreens Boots Alliance's stock price marginally fell 0.13% to end the day at $82.57. A total volume of 2.98 million shares were exchanged during the session. The Company's share price has gained 6.72% in the past six months and 0.22% on YTD basis. The Company's shares are trading at a PE ratio of 21.15 and have a dividend yield of 1.82%. Moreover, the stock currently has a market cap of $88.53 billion.

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SOURCE: Active Wall Street