Walgreens Boots Alliance (WBA) Fiscal 3Q17 Results: Beats and Raises Guidance, Announces New Agreement with Rite Aid

Executive Summary

• Walgreens Boots Alliance reported fiscal 3Q17 adjusted EPS of $1.33, above the $1.30 consensus estimate. Revenues were $30.1 billion, up 2.1% year over year and above the $29.7 billion consensus estimate. Sales increased by 5.0% on a constant-currency basis in the quarter.
• Separately, the company announced the replacement of its merger agreement with Rite Aid with a new agreement to purchase 2,186 stores, three distribution centers and related inventory for $5.175 billion in cash plus the assumption of related real estate leases and other liabilities. The new transaction is expected to close within the next six months.
• The company also raised the lower end of its FY17 guidance by $0.08 per share, and now expects adjusted EPS of $4.98–$5.08.