Walgreens Boots Alliance Nearly Halves Dividend To Strengthen Balance Sheet, Reports Better Than Expected Q1 Earnings

Walgreens Boots Alliance Inc's (NASDAQ: WBA) Q1 FY24 sales increased 10% Y/Y to $36.7 billion, up 8.7% on a constant currency basis, beating the consensus of $34.86 billion.

Adjusted operating income was $687 million, down 33% Y/Y on a constant currency basis, reflecting softer U.S. retail market trends, partly offset by improved profitability in U.S. Healthcare and International growth.

Adjusted EPS decreased 43.1% to $0.66, beating the consensus of $0.61, according to data from Benzinga Pro.

Walgreens' U.S. retail pharmacy segment generated $28.9 billion in sales, up 6.4%. Comparable sales at individual locations rose 8.1%. 

Total prescriptions filled in the quarter, including immunizations, adjusted to 30-day equivalents was 311.6 million, which was flat compared to the prior year.

Dividends: Walgreens also reduced its quarterly dividends by 48% to 25 cents per share, payable on March 12, 2024, to stockholders of record as of February 20, 2024.

"We have made the difficult decision to reduce our quarterly dividend payment to 25 cents per share to strengthen our long-term balance sheet and cash position," said CEO Tim Wentworth. 

Walgreens Boots Alliance maintains FY24 adjusted EPS of $3.20-$3.50 compared to the consensus of $3.33, down from $3.98 in FY23.

The company expects U.S. Healthcare adjusted EBITDA to be breakeven at the midpoint of the guidance range of ($50) to $50 million.

Price Action: WBA shares are down 9.80% at $23.07 on the last check Thursday.

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