Could WBA's Q2 2025 EPS beat expectations again?

**Walgreens Boots Alliance (WBA) likely faced a challenging quarter for earnings**, as evidenced by the significant year-over-year decline in Adjusted EPS and the company's withdrawal of fiscal 2025 guidance. Here's an analysis based on the latest data:

1. **Expected EPS Performance**:
- WBA's Adjusted EPS for Q2 2025 was $0.63, which is a substantial 47.5% decrease from the $1.20 reported in the same period last year.
- This decline is attributed to factors such as the adjusted effective tax benefit from the prior year, lower retail sales, and reduced profits from sale leasebacks.
2. **Comparison with Expectations**:
- Analysts had anticipated a higher EPS, with expectations potentially exceeding $1.00.
- WBA's performance fell short of these expectations, indicating a potential negative surprise for investors.
3. **Sales Growth and Other Financial Metrics**:
- Despite the EPS disappointment, WBA achieved a 4.1% year-over-year increase in total sales, reaching $38.6 billion.
- The company's sales growth was driven by improvements in the US Retail Pharmacy and International segments.
4. **Guidance and Strategic Considerations**:
- WBA withdrew its fiscal 2025 guidance due to the pending acquisition by Sycamore Partners, which adds uncertainty to future earnings projections.
- The acquisition is set to be completed in the fourth quarter of 2025, which could significantly impact WBA's financials and operational strategies.
5. **Future Prospects**:
- The company is in the early stages of a turnaround plan, aiming to balance cash needs with necessary investments to adapt to the changing pharmacy and retail landscape.
- The anticipated merger with Sycamore Partners could lead to a shift in WBA's financial performance and strategic direction.

In conclusion, WBA's Q2 2025 EPS did not meet expectations, and the company's guidance withdrawal further complicates the forecast for future earnings. The significant merger and strategic shifts suggest that while there may be potential for long-term value creation, the near-term earnings outlook remains challenging. Investors should monitor WBA's operational improvements and the progress of the merger closely.