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Walgreens Boots Alliance, Inc. (NASDAQ:) announced on Thursday its fiscal year and Q4 results, revealing a net loss of $3.1 billion compared to net earnings of $4.3 billion last year. The operating loss for fiscal 2023 was reported at $6.9 billion, in contrast to last year’s operating income of $1.4 billion. The loss per share decreased to $3.57 from an EPS of $5.01 in the previous year.
Despite these losses, the company reported a 4.8% increase in sales for fiscal 2023, totaling $139.1 billion, and a 9.2% rise in Q4 sales to $35.4 billion. This growth was largely due to the U.S. Retail Pharmacy and International segments’ performance, with the U.S. Healthcare segment’s growth influenced by pro forma growth and acquisitions of CareCentrix and Summit Health.
Interim CEO Ginger Graham also announced a cost restructuring plan aimed at addressing these performance challenges. The firm seeks a $1 billion cost reduction and a $600 million cut in capital expenditure within six weeks, with effects expected to be seen in Q2 of fiscal 2024.
Under new CEO Tim Wentworth, Walgreens has implemented cost-cutting measures such as adjusting store hours, closing unprofitable locations, and exiting five markets and 60 clinics in the next fiscal year. The company has also paused the modernization of pharmacy systems and halted the launch of pharmacy automation technology centers.
Over the past two years, Walgreens opened 11 micro-fulfillment centers across 29 states and plans to have a total of 19 such sites by the end of 2024. This move comes despite abandoning a sale of its international business unit worth over $6 billion and experiencing a 40% drop in share value this year.
Following these announcements, Walgreens’ shares rose by 6.1%. The company’s US retail pharmacy unit posted a revenue of $27.7 billion, while international business sales rose by 12%. Fourth-quarter earnings were 67 cents a share, missing estimates by 2 cents. For fiscal 2024, WBA expects an adjusted EPS of $3.20 to $3.50, offset by lower sale and leaseback contribution, a higher tax rate, and lower COVID-19 contribution.
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