Walgreens Finishes FY 2020 With Mixed Results, Anticipates COVID Impact Through First Half of FY 2021

For the full year, Walgreens reported metrics that were similar to the company's quarterly performance: sales rose while operating income, EPS, and adjusted EPS fell.

Walgreens Boots Alliance ended fiscal year (FY) 2020 with mixed financial results, including a small uptick in sales but declines in operating income, earnings per share (EPS), and net cash provided by operating activities, according to the company's earnings report released Thursday morning.

For the quarter, Walgreens saw sales increase 2.3% to $34.7 billion, though operating income and adjusted operating income both fell more than 26%, respectively.

The company's EPS declined nearly 43%, adjusted EPS fell just over 28%, and the "estimated adverse COVID-19" impacted was measured at $0.46.

Related: Walgreens Posts $1.6B Operating Loss in Q3, Suspends Share Buybacks

For the full year, Walgreens reported metrics that were similar to the company's quarterly performance: sales rose while operating income, EPS, and adjusted EPS fell.

Additionally, net cash provided by operating activities dropped by $109 million year-over-year, while free cash flow increase to $4.1 billion.

C-suite perspective:

"I am pleased to report results that came in at the high end of our expectations as we continue to adapt and transform our business model to changing customer needs," Stefano Pessina, CEO of Walgreens, said in a statement. "Despite uncertainty amid the global COVID-19 pandemic, we are seeing gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business. I'm also encouraged by the accelerating growth in our e-commerce platforms. Now, more than ever, our pharmacy-centered business is at the heart of community healthcare and we are expanding on that role for the future. I continue to be inspired by the tireless efforts of our teams as they support and care for our customers, patients and communities, while accelerating progress on our clear set of strategic priorities. Looking ahead, we are projecting adjusted EPS growth in fiscal 2021, as reflected in our new guidance."

Going forward, the company has projected "low single-digit growth" in adjusted EPS for FY 2021.

Walgreens also anticipates that the negative impact of the pandemic will gradually reduce during FY 2021 but expects the first half to still be affected by the outbreak.

Related: Walgreens Reports Data Breach Affecting 72K Individuals

"Significant investments in fiscal 2021 are expected to accelerate the company's customer-centric approach, with specific focus on transforming omnichannel capabilities and offerings across retail and healthcare. These investments are expected to contribute to the second-half growth profile," the company stated in a press release. "While this guidance anticipates a continued gradual reduction in COVID-19 impacts, the evolution of the pandemic remains uncertain. COVID-19 could present both incremental risks as well as opportunities for the company's business."

Related: A Prescription for What Ails CVS, Walgreens

Since releasing its Q3 earnings report in early July, Walgreens has undergone multiple leadership changes.

On July 27, Pessina announced that he would step down as CEO and assume the role of executive chairman of the company. Meanwhile, on August 31, Walgreens announced that John Standley, former CEO of Rite Aid, would lead U.S. operations as president of the company.

For complete financial information, review Walgreens' filing with the Securities and Exchange Commission.