Walgreens Boots Alliance Inc. (NASDAQ:WBA)

The financial margins and returns of the company exhibit notable trends over the analyzed periods. A consistent decline is observed in the gross profit margin, decreasing steadily from approximately 28% in late 2014 to around 20.5% by mid-2020. This suggests increasing cost pressure or reduced pricing power over the years.

Similarly, the operating profit margin shows a downward trajectory with minor fluctuations. It begins at about 5.57% at the end of 2014, experiences some variability, but trends downward to a significant low of approximately 1.11% in the last quarter of data. The decline indicates deteriorating operational efficiency or rising operating expenses relative to revenue.

The net profit margin demonstrates a more volatile pattern with some peaks and troughs but overall declines from an initial 2.69% to just 0.55%. Despite intermediate increases, the trend suggests that profitability at the bottom line is weakening, possibly influenced by lower operating margins and other financial factors such as interest or tax expenses.

Regarding returns, the return on equity (ROE) initially rises from about 10.11% to a peak exceeding 20% in early 2019, indicating periods of strong equity profitability. However, a sharp decline follows, reaching 3.67% by mid-2020. This significant fall may reflect reduced net income, increased equity base, or both.

The return on assets (ROA) shows a similar pattern, increasing from approximately 4.29% to a peak of 7.61% around early 2019 before declining sharply to 0.88%. This reflects a diminished efficiency in asset utilization to generate profits towards the latter part of the period.

Overall, the company experiences steady erosion in profit margins and a pronounced reduction in returns in the most recent periods. The data points to challenges in maintaining profitability and asset efficiency over time, with especially severe declines evident near the end of the available timeframe.

Gross Profit Margin

Continuous decline from ~28% to 20.5% indicating margin compression.

Operating Profit Margin

Downward trend with fluctuations, dropping to near 1%—suggesting increasing operating costs or lower revenue efficiency.

Net Profit Margin

Volatile but overall decreasing from 2.69% to 0.55%, signaling weakening bottom-line profitability.

Return on Equity (ROE)

Rose initially to above 20%, then sharply declined to 3.67%, reflecting reduced profitability or possibly increased equity levels.

Return on Assets (ROA)

Increased to over 7.6% before sharply dropping to below 1%, indicating declining asset utilization effectiveness.

The analysis of the quarterly financial data reveals several notable trends regarding gross profit, sales, and gross profit margin over the presented periods.

Sales

Sales exhibited an overall increasing trend from the initial period to the latter periods. Starting at approximately $19.6 billion, sales increased steadily with some fluctuations, reaching a peak close to $35.8 billion before slightly declining toward the last recorded period. This reflects consistent revenue growth with periodic variations.

Gross Profit

Gross profit also showed an overall upward trend in the earlier periods, rising from about $5.3 billion to peaks around $8.1 billion. However, in the latest periods, there was a noticeable decline, with gross profit falling to roughly $6.4 billion. This decline occurs despite sales generally maintaining higher levels, indicating potential cost pressures or changes in pricing dynamics.

Gross Profit Margin

The gross profit margin displayed a clear downward trend throughout the periods analyzed. Starting from nearly 28%, it gradually decreased each quarter, ending at approximately 20.5%. This consistent margin compression suggests that the company's cost of goods sold increased at a faster rate than sales or that sales mix changes favored lower-margin products.

In summary, while sales showed robust growth over most quarters, gross profit growth was less consistent and declined in the later periods. The persistent decrease in the gross profit margin highlights increasing cost challenges or competitive pricing pressures impacting profitability despite rising revenues.

The quarterly financial data indicates fluctuating trends in operating income, sales, and operating profit margin over the observed periods.

Operating Income (Loss)

Operating income experienced variability, with an initial increase from 1,054 million US dollars in November 2014 to a peak of 1,860 million US dollars in February 2016. Following this peak, the figure showed a declining trend with some volatility, ending with a significant loss of 1,584 million US dollars in May 2020. This drop marks a considerable shift from prior positive earnings to a substantial operating loss.

Sales

Sales generally demonstrated an upward trajectory across the periods. Starting at 19,554 million US dollars in November 2014, sales increased steadily, reaching a high of approximately 35,820 million US dollars in May 2020. Despite some fluctuations, the overall pattern indicates consistent growth in revenue generation.

Operating Profit Margin

The operating profit margin showed a gradual decline over the quarters. It began at 5.57% in November 2014 and decreased to 1.11% by May 2020. The margin maintained moderate stability around the 4.5% to 5% range for several quarters before experiencing a more pronounced decline in the most recent periods. This downward trend in margin reflects increased costs or pricing pressures reducing profitability relative to sales.

In summary, while sales have increased over the timeframe, operating income has decreased and ultimately turned negative, accompanied by a consistent decline in operating profit margin. This pattern suggests that despite growing revenue, operational efficiencies or costs have significantly impacted profitability in recent quarters.

The financial data over the analyzed quarters reveals several significant trends for the company. Sales generally show an upward trajectory with some fluctuations. Starting from approximately 19.5 billion USD in late 2014, sales increased steadily, reaching peaks above 35 billion USD by early 2020, despite some quarters experiencing minor declines or stabilization.

Net earnings attributable to the company exhibit more volatility. There are periods of strong profitability, such as early 2015 with earnings over 2 billion USD, and mid-2018 with earnings exceeding 1.5 billion USD. However, earnings also show notable declines at certain points, including a sharp drop resulting in a net loss in the most recent quarter reported. This variability indicates challenges in maintaining consistent net income levels relative to sales growth.

The net profit margin shows a pattern consistent with the volatility in net earnings. Margins peaked around 4.2% in mid-2015 but generally trended downward thereafter with intermittent recoveries. More recent quarters reveal a declining margin, reaching a low point of around 0.55% in the last quarter, signaling pressures on profitability despite relatively stable or growing sales.

Sales

Demonstrate a positive overall trend from roughly 19.5 billion USD to over 35 billion USD over the reviewed period, with occasional minor decreases or plateaus in quarterly figures.

Net Earnings

Exhibit high variability with periods of strong profits interspersed by significant declines, culminating in a substantial net loss in the latest quarter, suggesting fluctuating operational performance or extraordinary items impacting results.

Net Profit Margin

Shows a downward movement over time from a peak exceeding 4% to below 1%, highlighting challenges in maintaining profitability relative to revenue despite increasing sales volumes.

Overall, the data reflects a company experiencing growth in sales but facing difficulties in sustaining consistent profitability and managing earnings volatility in recent quarters. The decline in net profit margins toward the end of the period warrants further investigation into cost management, pricing strategy, or other operational factors affecting financial results.

The analysis of the quarterly financial data reveals several key trends concerning net earnings, shareholders’ equity, and return on equity (ROE) over the observed periods.

Net Earnings (Loss) Attributable to Walgreens Boots Alliance, Inc.

The net earnings exhibit notable fluctuations throughout the quarters. Initially, earnings start at a moderate level, followed by a significant spike in early 2015. Subsequently, earnings experience volatility with several peaks and troughs, remaining mostly positive and relatively stable around the range of approximately 800 to 1500 million US dollars. However, the last reported quarter shows a pronounced loss of -1708 million US dollars, indicating a sharp reversal in profitability.

Total Shareholders' Equity

Shareholders’ equity presents an overall declining trend over the periods. Starting from above 20 billion US dollars, it reaches a peak exceeding 31 billion US dollars in early 2015 and mid-2016. From late 2016 onwards, shareholders’ equity predominantly decreases, showing a gradual erosion in the equity base, ending around 20.7 billion US dollars in the last available period. This decline suggests either distribution, losses, or asset value decreases impacting the equity.

Return on Equity (ROE)

Return on equity demonstrates general strength with some variability. It begins close to 10% and shows an upward trend, peaking beyond 20% in multiple quarters between 2017 and 2019. This indicates periods of efficient utilization of equity to generate profits. However, the final quarter analyzed records a dramatic drop to 3.67%, aligned with the reported net loss and lower equity base. This steep decline in ROE reflects reduced profitability relative to equity and increased financial strain.

Net Earnings (Loss) Attributable

The net earnings demonstrate significant volatility over the observed periods. Initially, there was a strong increase from 850 million to a peak at 2042 million within the first year. Following this peak, earnings dropped sharply to 26 million but recovered to a range generally between 800 and 1500 million in subsequent quarters. However, the most recent quarters reflect a concerning decline, culminating in a substantial loss of 1708 million, indicating a potential challenge or one-off event impacting profitability.

Total Assets

Total assets show a fluctuating yet overall positive trend with values mostly ranging between 66,000 million and 74,000 million for most periods. There is a notable jump to above 90,000 million near the end of the timeline, followed by a slight decline but maintaining levels well above those seen earlier in the data. This increase in assets may indicate acquisition activity, expansion, or revaluation of asset holdings.

Return on Assets (ROA)

The ROA percentage suggests an initial growth phase, rising from 4.29% up to over 7% in certain quarters, which reflects improved profitability relative to asset base. This upward trend peaks around 2018 and early 2019, showing efficient asset utilization during this period. Yet, a marked decline appears in the final quarters, dropping sharply to less than 1%, pointing towards diminished returns and possibly strained operational effectiveness or increased asset base without corresponding earnings.

Overall Financial Trends

The combination of decreasing net earnings culminating in a significant loss and sharply falling ROA despite a higher asset base suggests monetary stress in the latest period. The increase in total assets without proportional profit increase indicates lower asset efficiency. These patterns may warrant further investigation into factors such as impairment charges, restructuring costs, or broader market impacts affecting earnings and asset productivity.