Walgreens Boots Alliance Inc. (NASDAQ:WBA)

Gross Profit Margin

The gross profit margin demonstrates a consistent declining trend over the period analyzed. Beginning at approximately 28.23% in late 2013, the margin steadily decreased to 20.5% by mid-2020. This indicates a gradual erosion in the company's ability to retain profit from sales after accounting for the cost of goods sold, suggesting potential pressures on pricing, increased cost of goods, or changes in sales mix.

Operating Profit Margin

The operating profit margin shows some fluctuations but generally follows a downward trajectory. Starting at around 5.49% in late 2013, it peaked modestly around 5.57% early in 2014, before declining steadily to 1.11% by mid-2020. This decrease implies rising operating expenses relative to revenue or weakening operational efficiency over time, negatively impacting core profitability.

Net Profit Margin

The net profit margin exhibits volatility with a modest overall decline from roughly 2.53% in late 2013 to 0.55% in mid-2020. While there are periods of improvement, such as peaks near 4.21% in 2014, the general trend points to shrinking bottom-line profitability, possibly reflecting higher costs, increased financial charges, or other non-operating impacts during certain periods.

Return on Equity (ROE)

Return on equity shows an initial upward trend, rising from about 9.44% in late 2013 to a peak above 20% in early 2019. However, after this peak, there is a marked decline to approximately 3.67% by mid-2020. This pattern suggests earlier improvements in generating returns for shareholders were reversed significantly, potentially due to declining net income or increased equity base without commensurate earnings growth.

Return on Assets (ROA)

The return on assets trend similarly rises from around 5.2% in late 2013 to a peak near 7.61% in early 2019, followed by a sharp decline to 0.88% by mid-2020. This indicates diminishing effectiveness in utilizing assets to generate profit over the final periods, aligning with the decreased profitability and efficiency signals noted in other margins and returns.

The financial data reveals several notable trends in the company's quarterly performance over the analyzed period.

Sales Performance

Sales exhibited an overall increasing trend, rising from approximately 18,329 million US dollars in November 2013 to a peak of 35,820 million US dollars in February 2020. Despite some fluctuations, particularly between mid-2016 to late-2017 where sales plateaued around the 29,000 to 31,000 million range, the upward trajectory remained consistent over the longer term. The data indicates substantial growth in sales, particularly from early 2015 onwards, reflecting a strong expansion in revenue-generating activities.

Gross Profit Development

Gross profit also increased over time but at a less consistent rate compared to sales. Starting at 5,152 million US dollars in November 2013, it peaked around 7,867 million US dollars in February 2016 before experiencing some declines and fluctuations thereafter. Notably, gross profit showed some weakening going into mid-2020, falling to 6,438 million US dollars in May 2020. This pattern suggests that while sales grew significantly, gross profit gains were more volatile and subject to downward pressures in certain quarters.

Gross Profit Margin Trend

The gross profit margin exhibited a distinct and consistent downward trend throughout the period. Early data, though incomplete for margin percentages before 2014, shows margins declining from over 28% in late 2014 to 20.5% by May 2020. This gradual erosion of margin percentages indicates increasing cost pressures or changes in sales mix that diminished profitability on a relative basis. The steady decline suggests structural challenges in maintaining gross profit efficiency relative to sales.

In summary, while the company achieved substantial sales growth during the observed quarters, gross profit growth did not keep pace proportionally, as evidenced by a declining gross profit margin. This divergence suggests increasing cost of goods sold relative to revenues or competitive pressures impacting pricing and profitability. The data highlights the importance of addressing margin sustainability despite expanding top-line performance.

Operating Income (Loss)

Operating income showed notable fluctuations over the analyzed periods. Beginning at $924 million in late 2013, it generally increased, peaking around $1.9 billion in early 2016. After this peak, income displayed a downward trend with occasional recoveries, notably falling dramatically to a loss of $1.584 billion by May 2020. This indicates considerable volatility in operating performance, with the final quarter exhibiting a significant downturn.

Sales

Sales consistently increased throughout the period, starting at approximately $18.3 billion in late 2013 and rising to above $35 billion by mid-2020. The growth was steady and robust, reflecting strengthening revenue generation capacity. Minor fluctuations occurred but the overall trend was positive, highlighting expanding market presence or volume of goods and services sold.

Operating Profit Margin

The operating profit margin was variable but showed a declining trend over time. Beginning at around 5.5% in 2014, the margin remained relatively stable until the end of 2017, hovering between 4.5% and 5.5%. From 2018 onward, the margin gradually decreased, falling below 4% in 2019 and further dropping to approximately 1.1% by mid-2020. This suggests rising costs or pricing pressures negatively impacting profitability relative to sales.

Overall Analysis

The data indicates a company experiencing sales growth alongside decreasing operational efficiency. The steady increase in sales revenue contrasts with the declining operating profit margin, signaling margin compression. The pronounced drop into operating loss in mid-2020 warrants attention, as it may reflect extraordinary expenses, operational challenges, or external pressures adversely affecting financial performance. Efforts to control costs or enhance profitability margins may be necessary to reverse this trend.

The financial data for the analyzed periods reveals several notable trends concerning earnings, sales, and profitability margins.

Net Earnings (Loss) Attributable

The net earnings show considerable volatility across the quarters. Initially, earnings demonstrated moderate positive values, peaking in February 2015 at 2042 million USD, followed by a sharp decline reaching a negative value of -239 million USD in August 2014. After this fluctuation, the data reflects several quarters of positive earnings with some variation, generally remaining above 800 million USD, until the last quarter under review. In the most recent period (May 2020), there is a significant loss of -1708 million USD, marking the lowest point in the dataset. This sharp downturn suggests a substantial impact from extraordinary factors affecting profitability.

Sales

Sales have exhibited a general upward trajectory over the entire time span. Starting from 18,329 million USD in November 2013, sales increased with some fluctuations but maintained a growing trend, achieving a peak of 35,820 million USD in February 2020. Despite minor drops in certain quarters, the overall progression of sales indicates consistent demand or expansion in business operations. Notably, the increase in sales precedes the dramatic net earnings loss in the latest quarter, which might suggest rising costs or external challenges impacting net income contrary to sales growth.

Net Profit Margin (%)

The net profit margin exhibits a relatively stable pattern with moderate fluctuations. After the earliest data points are unavailable, the margin stabilizes at levels generally between approximately 2.5% and 4.2%. Margins peak around August 2015 at 4.21%, then oscillate but tend to decrease gradually over the subsequent years, moving closer to the lower end of the range by early 2020. In the last reported period, the margin plummets to 0.55%, reflecting the large net loss within a context of increased sales. This sharp decline in profitability margin may indicate rising operational costs, market pressures, or extraordinary negative effects.

In summary, the company exhibited growth in sales over the examined quarters while facing variable profitability outcomes. Early growth phases in earnings were interrupted by periods of losses and volatility. The most recent quarter demonstrates a significant earnings decline and a marked decrease in profit margin despite strong sales, suggesting emerging or acute challenges not directly related to sales volume. Continuous monitoring of cost management and external impacts is advisable given these observations.

The data reveals several distinct patterns in the financial performance and position over the specified periods.

Net Earnings (Loss) Attributable to the Company (US$ in millions)

The net earnings show significant fluctuations across the quarters. Initially, there is a general tendency towards positive earnings with occasional dips into negative territory, such as in August 2014 (-239 million US$) and a substantial loss in May 2020 (-1708 million US$). Between these periods, earnings reflect variability with peaks such as 2042 million US$ in February 2015 and consistently positive values around 1000-1500 million US$ from late 2016 through early 2019. However, the overall pattern shows volatility and occasional sharp declines in profitability.

Total Shareholders’ Equity (US$ in millions)

Shareholders’ equity exhibits a gradual increase from around 20,021 million US$ in late 2013, reaching a peak near 31,863 million US$ in mid-2015. After this peak, equity declines with some minor recoveries but generally trends downward to approximately 20,736 million US$ by mid-2020. This suggests that while equity grew strongly initially, it weakened over the latter periods, potentially reflecting company losses, distributions, or changes in asset valuation.

Return on Equity (ROE) (%)

ROE data, though incomplete in earlier periods, illustrates a rising trend beginning from 9.44% in November 2014, peaking at over 20% between early 2019 and late 2019. Following this peak, ROE declines steadily to 3.67% by May 2020, indicating a reduction in efficiency in generating profits from shareholders’ equity, possibly related to the large net loss observed in the same period.

In summary, the financial data indicates a company that experienced a period of growth in profitability and equity up to around 2015, with ROE improving significantly into 2019. However, this was followed by a phase of declining equity and sharp downturns in net earnings and profitability metrics in 2020. This pattern suggests increased financial strain or adverse impacts impacting the company's returns and capital base during the latter part of the observed timeline.

The analysis of the quarterly financial data reveals several notable trends and variations over the observed periods.

Net Earnings (Loss) Attributable

The net earnings demonstrate considerable volatility across the quarters. Initial positive earnings experienced a sharp decline to a notable loss in August 2014, followed by a recovery peaking in early 2015. Subsequent quarters showed fluctuations with periods of moderate gains. However, the most recent quarter indicates a substantial loss, marking the lowest point within the dataset. This pattern suggests exposure to fluctuating operational conditions or one-off events impacting profitability.

Total Assets

Total assets exhibited a substantial rise beginning in late 2014, reaching a peak around early 2017. Thereafter, asset values generally stabilized with minor oscillations until early 2020. The data shows a steep increase towards the end of the period, potentially reflecting acquisitions, investments, or revaluation effects. Overall, the growth trend in assets likely reflects strategic expansion or asset accumulation over time.

Return on Assets (ROA)

ROA values, available from mid-2014 onwards, indicate a positive and relatively stable performance, mostly ranging between roughly 4% and 7.6%. The highest ROA appeared near the end of 2018 and early 2019, after which there is a noticeable decline that continues towards the end of the dataset. The ROA reduction in the final quarters corresponds with the sharp decrease in net earnings, despite the asset base remaining substantial. This suggests diminishing efficiency in asset utilization or elevated costs affecting returns.

In summary, the financial trends show a company that experienced significant earnings volatility, a strong increase and subsequent stabilization of asset base, and initially stable but later declining efficiency in generating returns from its assets. The recent negative net earnings alongside declining ROA raise considerations regarding profitability challenges and operational effectiveness in the latest periods.