Walgreens Boots Alliance (WBA.US) released its third-quarter fiscal 2024 results on Wednesday after the market closed. The report was worse than expected, leading to another wave of investor sell-offs. On Thursday, the shares dropped more than 25%, while on Friday, they closed unchanged as the bulls failed to regain control.
- WBA.US has lost more than 88% of its value since its peak in July 2015.
- The company's market capitalization has fallen from $111 billion to $12 billion currently.
- The share price is at a 27-year low.
Walgreens Boots Alliance (WBA) reported its fiscal 2024 third-quarter results, highlighting a 2.6% year-over-year increase in sales to $36.4 billion, driven by growth across all segments. Despite this, adjusted earnings per share (EPS) dropped 36.6% to $0.63 due to reduced sale-leaseback gains, a challenging U.S. retail environment, and adverse pharmacy industry trends.
Third Quarter Financial Metrics
- Sales: Increased 2.6% year-over-year to $36.4 billion
- Earnings Per Share (EPS): $0.40 compared to $0.14 in the year-ago quarter
- Adjusted EPS: $0.63, down 36.6%
- Operating Income: $111 million compared to a loss of $477 million in the previous year
- Adjusted Operating Income: $613 million, down 36.3%
- Net Earnings: $344 million compared to $118 million in the previous year
- Adjusted Net Earnings: $545 million, down 36.5%
- Net Cash Provided by Operating Activities: $605 million
- Free Cash Flow: $334 million, an increase of $778 million
Walgreens Boots Alliance also announced plans to close a significant number of its approximately 8,700 U.S. stores due to shaky consumer spending. CEO Tim Wentworth noted the increasing selectivity and price-sensitivity of consumers, leading to pressure on the company's retail operations. Despite already closing 625 U.S. stores as of February, Walgreens did not specify the number of additional closures but indicated that about a quarter of its U.S. stores could be affected.
The company has lowered its fiscal 2024 earnings forecast to $2.80-$2.95 per share, down from the previous $3.20-$3.35 range, due to challenging pharmacy industry trends and a pressured consumer environment.
Source: xStation 5
