McKesson (MCK) investor relations material

Executive summary

• Revenues for Q1 FY27 rose 8% to $105.4B, driven by North American Pharmaceutical and Oncology & Multispecialty growth, while adjusted EPS increased 20% to $9.93 and GAAP EPS declined 18% to $5.15 due to a $293M charge related to Medical-Surgical Solutions.

• Raised full-year adjusted EPS guidance to $44.20–$45.00, reflecting 13–15% growth and confidence in business momentum.

• Advanced the planned separation and rebranding of Medical-Surgical Solutions as Wellverse, including a 13% minority sale to Apollo Funds for $1.25B.

• Returned $2.6B to shareholders, including $2.5B in share repurchases and a 15% dividend increase to $0.94 per share.

• Continued strategic focus on AI, technology investments, and operational efficiency, including leadership changes and enterprise-wide AI training.

Financial highlights

• Gross profit rose 13% to $3.7B; operating profit up 16% to $1.7B; adjusted earnings totaled $1.18B, up 14% year-over-year.

• Net income attributable to the company was $614M, down 22% year-over-year, with diluted GAAP EPS at $5.15.

• Operating expenses increased 10% to $2.1B, but operating leverage improved by 150 basis points year-over-year.

• Free cash flow for the quarter was negative $372M, but trailing 12-month free cash flow was $6.15B.

• Returned $2.6B to shareholders via share repurchases and dividends; board approved a 15% dividend increase.

Outlook and guidance

• Fiscal 2027 adjusted EPS outlook raised to $44.20–$45.00, implying 13–15% growth; no GAAP EPS guidance due to unpredictability of certain adjustments.

• Revenue growth expected at 5–9%, operating profit growth at 9–13%.

• Segment guidance: North American Pharmaceutical revenue up 4–8%, Oncology & Multispecialty up 14.5–18.5%, Prescription Technology Solutions up 2.5–6.5%, Medical-Surgical Solutions up 1–6%.

• Free cash flow guidance of $4.5–$4.9B; $5B in share repurchases planned for FY27.

• Management expects available cash, investments, and credit facilities to be sufficient for short- and long-term needs.