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Highlights
Walgreens reported Q4 FY2024 revenue of $37.5 billion and adjusted earnings of $0.39 per share, surpassing previous estimates and leading to a stock surge of over 20%.
The company anticipates fiscal 2025 sales between $147 billion and $151 billion, alongside adjusted earnings projected between $1.40 and $1.80 per share.
Walgreens plans to close 1,200 stores over the next three years, with 500 closures in 2025 aimed at enhancing profitability and overall margin profile.
Walgreens (NASDAQ:WBA) recently announced its Q4 FY2024 results, revealing revenues and earnings that exceeded analyst expectations. The company reported revenue of $37.5 billion, a 6% increase from the previous year, and adjusted earnings of $0.39 per share, compared to estimates of $34.9 billion and $0.38, respectively. This positive performance and a favorable outlook for fiscal 2025 contributed to a surge in WBA stock, which rose over 20% within two days following the announcement.
In Q4, the U.S. Retail Pharmacy division was a significant driver of growth, with sales rising 6.5% year-over-year to $29.5 billion. International sales also grew by 3.2%, reaching $6 billion, while the U.S. Healthcare business increased by 7.1% to $2.1 billion. Despite these gains, Walgreens faced a decline in retail sales of 3.5%, and the adjusted operating margin dropped to 0.9%, down from 1.6% in the same quarter last year. The adjusted earnings were lower than the previous year’s figure of $0.67 per share, attributed to reimbursement pressures within the pharmacy sector.
Looking ahead, Walgreens forecasts fiscal 2025 sales to fall between $147 billion and $151 billion, with adjusted earnings anticipated to be in the range of $1.40 to $1.80 per share, aligning with consensus estimates. Management also announced a strategic plan to close 1,200 stores over the next three years, with 500 closures scheduled for 2025, aimed at enhancing profitability and improving the overall margin profile.
Despite the recent stock price increase, WBA remains down 56% year-to-date, reflecting significant volatility compared to the S&P 500. The stock’s performance has been inconsistent over time, contrasting with the Trefis High Quality (HQ) Portfolio, which has consistently outperformed the benchmark. For a more comprehensive understanding, comparisons with peers across the industry can provide additional insights into Walgreens' performance metrics.
