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Walgreens Reports Reduced Net Loss, Incoming CEO to Lead 2024 Projections


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Walgreens Boots Alliance (NASDAQ:WBA) Inc., under the interim leadership of CEO Ginger Graham and CFO Manmohan Mahajan, reported a reduced net loss for the fiscal fourth quarter on Thursday. The net loss stands at $180 million, a significant decrease from the previous year’s loss of $415 million. This comes despite the fact that the company has been operating with a significant debt burden, as noted by InvestingPro Tips. Adjusted earnings per share fell by 17% to 67 cents, missing the FactSet consensus of 69 cents, and 4 analysts have revised their earnings downwards for the upcoming period according to InvestingPro Tips.

Sales, on the other hand, exceeded expectations with a growth of 9.2% to reach $35.42 billion, compared to the Revenue LTM2023.Q3 of $136.11B USD as provided by InvestingPro Data. This increase was largely driven by U.S. retail pharmacy and international sales, as well as a significant rise in U.S. healthcare sales due to acquisitions. Walgreens, being a prominent player in the Consumer Staples Distribution & Retail industry, has proven its ability to generate revenue even in challenging times.

In the same period, COVID-19 vaccinations administered by the company saw a drastic drop to 400,000 shots in the quarter, a significant decrease from 2.9 million a year earlier. To counterbalance this and adjust its cost structure, Walgreens has planned cost cuts of at least $1 billion. These cuts include adjusting store hours, closing unprofitable stores, and streamlining the supply chain using AI.

Incoming CEO Tim Wentworth is set to lead the company’s fiscal 2024 projections amidst these changes and leadership upheaval. The company anticipates an adjusted EPS of between $3.20 to $3.50, falling below consensus estimates. Walgreens expects to administer 5 million COVID-19 vaccinations, marking a decrease from 12 million in fiscal 2023.

Additionally, the company plans to exit about 60 clinics in its U.S. healthcare business and anticipates an increase in “shrink”, or inventory loss. Despite these challenges and restructuring efforts, Walgreens shares gained 3.7% on Thursday but are down 37% for the year, which is in line with the 1 Year Price Total Return Y2023.D285 of -25.03% as reported by InvestingPro Data. In comparison, the S&P 500 is up 13.7% for the year.

Interestingly, Walgreens has a history of rewarding its shareholders. It has raised its dividend for 47 consecutive years and pays a significant dividend to shareholders, with a Dividend Yield Y2023.D285 of 8.5% according to InvestingPro Data. This commitment to shareholder returns, coupled with its high shareholder yield, makes it a noteworthy investment for dividend-focused investors. For more insights like these, consider the InvestingPro product, which includes several additional tips.

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