Revealing Financial Insights from The Fiscal Year and Fourth Quarter

Walgreens Boots Alliance, Inc. (Nasdaq: WBA) has reported a staggering financial setback for fiscal year 2024, concluding on August 31, 2024. The company ended the fourth quarter with a loss per share of **$3.48**, compared to just **$0.21** in the same period last year. This downturn was heavily impacted by non-cash charges linked to opioid liabilities and impairment charges concerning significant investments.

Adjusted earnings per share (EPS) fell to **$0.39**, marking a sharp decline of **40.8% on a constant currency basis**. Revenue pressures, alongside the absence of prior year gains from sale-leaseback transactions, weighed heavily on performance. However, there was a glimmer of hope with fourth quarter sales reaching **$37.5 billion**, a **6.0% increase** year-over-year.

When looking at the entirety of fiscal 2024, Walgreens recorded a significant loss of **$10.01 per share**, a stark rise of **180.4%** from the previous year. Contributing factors included a major non-cash impairment charge related to VillageMD goodwill, as well as continuing opioid-related liabilities from prior claims.

Nonetheless, the overall sales for fiscal 2024 climbed to **$147.7 billion**, a notable **6.2% increase**. The company notably achieved an adjusted EBITDA increase of **$442 million** in its U.S. Healthcare segment and successfully exceeded targets for cost savings, capital reductions, and enhancements in working capital initiatives.

Looking Ahead: Strategic Footprint Optimization

As the company looks to the future, guidance for fiscal 2025 anticipates adjusted EPS between **$1.40 and $1.80**. Growth in U.S. Healthcare and International ventures are expected to be offset by declines in U.S. Retail Pharmacy, along with an elevated tax rate and reduced contributions from prior years' sale-leaseback activities.

To improve financial stability, Walgreens is implementing a **footprint optimization program**, targeting approximately **1,200 store closures** over the next three years, with nearly **500 closures planned for fiscal 2025**. This strategy aims to provide immediate enhancements to adjusted EPS and free cash flow.

CEO Tim Wentworth's Vision for Recovery

During the announcement, CEO Tim Wentworth emphasized the disciplined approach to cost management and the need for strategic changes to stabilize its retail pharmacy division. Wentworth asserted, “Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation.” The CEO remains dedicated to a long-term turnaround, bolstered by consumer benefits and financial improvements.

Final Thoughts

The challenges Walgreens Boots Alliance faces are multifaceted and indicative of a broader trend within the retail pharmacy landscape. With ongoing economic pressures and increased operational costs, investors and stakeholders are keenly monitoring the company's strategic maneuvers and recovery efforts in the coming fiscal year. The pressing question remains: will Walgreens emerge from this turmoil stronger, or will these losses force deeper cuts and more significant changes in the years ahead? The next chapter of this major pharmaceutical player is indeed one to watch closely.