Walgreens Boots Alliance Inc (NASDAQ: WBA) reported fourth-quarter fiscal year 2024 sales of $37.55 billion on Tuesday.
That's up 6% year over year (+6.1% on constant currency). The numbers beat the consensus of $35.76 billion, reflecting sales growth across all segments.
Walgreens Boots Alliance announced a footprint optimization program targeting approximately 1,200 closures over the next three years. This includes approximately 500 closures in fiscal 2025, which will be immediately accretive to adjusted EPS and free cash flow.
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The company said it exceeded fiscal 2024 targets for $1 billion in cost savings, a $600 million reduction in capital expenditures, and $500 million in working capital initiatives.
Truist Securities noted that Walgreens Boots Alliance finished the fiscal year 2024 on a strong note, meeting management's expectations and exceeding projections for both revenue and earnings.
The fiscal 2025 guidance reflects optimism, aligning with the higher end of Truist Securities' and consensus forecasts.
Both international and U.S. healthcare segments delivered solid performances despite ongoing challenges in consumer spending and pharmacy reimbursement pressures. However, the outlook on reimbursement was positive. Fourth-quarter cash flow surpassed expectations and remains a critical focus, while capital expenditures and working capital improvements are encouraging.
Truist maintains the Hold rating, with a price target of $10.
RBC Capital notes that Walgreens Boots Alliance has outlined its planned store closures through 2027, offering greater clarity and reducing the uncertainty around the higher end of potential closures.
The analyst also highlights that Walgreens is investing in locations it anticipates will absorb prescriptions and foot traffic from the closing stores.
Having already shuttered a few hundred locations in fiscal year 2024, the company has recent experience managing patient transitions and prescription volumes.
Evercore ISI maintains Walgreens Boots Alliance with an In-Line rating and raises the price target from $7.5 to $10.
Price Action: WBA stock is up 4.32% at $10.87 at last check Wednesday.
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