Walgreens Boots Alliance Reports 4QFY2024 with $0.39 Adjusted EPS, $978 M Operating Loss
In the fourth quarter of fiscal year 2024, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) reported a significant increase in sales, with a 6.0 percent rise year-over-year to $37.5 billion, reflecting growth across all business segments. Despite this growth, the company faced a challenging quarter with a substantial operating loss of $978 million, marking a 117.1 percent increase from the previous year.
This loss was primarily driven by a non-cash goodwill impairment charge related to CareCentrix and other factors. The adjusted operating income stood at $424 million, a decrease of 37.7 percent on a constant currency basis, influenced by softer U.S. retail and pharmacy performance.
The net loss for the fourth quarter was $3.0 billion, compared to $180 million in the same period last year. This was largely attributed to a $2.3 billion non-cash charge for valuation allowance on deferred tax assets, primarily linked to opioid liabilities recognized in prior periods, and a non-cash impairment charge related to equity investment in China.
The loss per share was $3.48, a stark contrast to a loss per share of $0.21 a year ago. However, adjusted earnings per share (EPS) were $0.39, down 40.8 percent on a constant currency basis, but surpassing the expected EPS of $0.362.
WBA Reports EPS and Revenue in line with Expectations for the Fourth Quarter of Fiscal 2024
The fourth quarter results of Walgreens Boots Alliance were in line with some expectations, yet they highlighted significant challenges and variances.
The company reported an adjusted EPS of $0.39, which exceeded the anticipated $0.362, despite an overall loss per share of $3.48. This achievement in adjusted EPS was driven by cost savings and growth in the U.S. Healthcare segment, which helped offset the pressures from net reimbursement and the absence of prior year sale-leaseback gains.
Revenue for the quarter was reported at $37.5 billion, surpassing the expected $35.75 billion, marking a 6.0 percent year-over-year increase. This growth was primarily fueled by higher pharmacy sales, which increased by 9.6 percent, and a 6.5 percent rise in U.S. Retail Pharmacy sales.
However, the retail segment faced challenges, with retail sales decreasing by 3.5 percent, reflecting a tough retail environment and continued channel shift. These results underscore the company’s ability to generate revenue growth despite facing significant operational challenges and economic pressures.
WBA Expects Fiscal 2025 EPS to Range Between $1.40 to $1.80
Looking ahead, Walgreens Boots Alliance has set its fiscal 2025 guidance with expectations of adjusted EPS ranging from $1.40 to $1.80. This guidance considers anticipated growth in the U.S. Healthcare and International segments, which are expected to more than offset declines in U.S. Retail Pharmacy. The company also anticipates a higher adjusted effective tax rate and lower contributions from sale-leaseback and Cencora earnings.
The company has announced a strategic footprint optimization program, targeting approximately 1,200 closures over the next three years, including around 500 closures in fiscal 2025.
This initiative is projected to be immediately accretive to adjusted EPS and free cash flow, aligning with the company’s goals to stabilize the retail pharmacy sector, control operating costs, and improve cash flow. As stated by CEO Tim Wentworth, fiscal 2025 is seen as a pivotal year for rebasing and advancing the company’s strategy to drive long-term value creation.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Back to 
