Core Viewpoint - Walgreens Boots Alliance, Inc. is facing significant challenges, including declining stock prices and operational difficulties, despite some recent improvements in quarterly results [1][3][10]. Financial Performance - In Q3 2024, Walgreens Boots Alliance reported sales of 36,351million,reflectinga2.6111 million, a turnaround from an operating loss of 477millioninQ32023[3][4].−Dilutedearningspershareincreasedfrom0.14 in Q3 2023 to 0.40inQ32024,markinga186444 million to a positive 334millioninthesamequarter[3].SegmentAnalysis−TheU.S.RetailPharmacysegmentgenerated28,503 million in sales with a 2.3% year-over-year growth, but adjusted operating income declined 47.9% to 501million[4][5].−TheInternationalsegmentsawsalesincreaseto5,727 million, a 2.8% growth, but adjusted operating income fell 15.9% to 175million[5][6].−TheU.S.Healthcaresegmentreporteda7.62,125 million, but still faced an operating loss of 220million[6].ImpairmentandBalanceSheet−Asignificantnon−cashgoodwillimpairmentchargeof12.4 billion was recognized due to a downward revision in the long-term forecast from VillageMD management [7]. - Goodwill on the balance sheet decreased from 28,187millionto15,821 million, indicating a substantial write-off [7]. - The company has limited cash reserves of 703million,raisingconcernsaboutliquidity,especiallywith1,506 million in short-term debt and 7,407millioninlong−termdebt[7][8].DividendPolicy−WalgreensBootsAlliancecutitsdividendto0.25 per share, a nearly 50% reduction, losing its status as a dividend aristocrat [9]. - The current annual dividend of 1.00resultsinayieldof6.32.80 to $2.95, reflecting ongoing challenges in the retail pharmacy business and a difficult consumer environment [10][11]. - Despite some signs of hope, the overall sentiment remains cautious, with the company needing to manage its turnaround effectively to regain profitability [13].
Walgreens Boots Alliance(WBA) Seeking Alpha·2024-06-28 16:57