Walgreens Boots Alliance (WBA) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 marked a foundational year with a new executive team, positive cash flow, and groundwork for a multi-year turnaround, driven by cost cuts, CapEx reduction, and working capital initiatives.

• Strategic review led to a renewed focus on retail pharmacy, disciplined financial management, and sustainable value creation.

• Announced closure of approximately 1,200 underperforming stores over three years, with 500 targeted for fiscal 2025, as part of a footprint optimization program.

• Reoriented merchandising strategy to emphasize own brands and health/wellness categories.

• Asset monetization and cost control are key priorities for improving net debt and supporting long-term value creation.

Financial highlights

• Fiscal 2024 sales reached $147.7B, up 6.2% year-over-year; Q4 sales were $37.5B, up 6.0%.

• Fiscal 2024 GAAP net loss was $8.6B, up 180.4% from prior year, driven by non-cash impairment and tax charges; adjusted EPS was $2.88, down 27.9%.

• Operating cash flow for 2024 was $1B, impacted by $934M in legal payments and $386M in pension contributions; free cash flow was $23M, down $642M year-over-year.

• Net debt reduced by $1.9B and lease obligations by $1.2B in 2024; ended year with $3.2B in cash and $5.8B revolver capacity.

• Exceeded targets for $1B in cost savings, $600M CapEx reduction, and $500M working capital initiatives.

Outlook and guidance

• Fiscal 2025 adjusted EPS guidance is $1.40–$1.80, with sales expected between $147.0B–$151.0B and adjusted operating income of $1.6B–$2.0B.

• Store closures (~1,200 over three years, ~500 in FY25) are expected to be immediately cash flow accretive and provide a $100M AOI benefit in-year.

• Working capital initiatives to generate ~$500M in free cash flow; CapEx reductions of at least $150M planned; $950M in asset monetization expected over FY25–FY26.

• U.S. Healthcare segment adjusted EBITDA expected to improve by $250M to $280–$350M.

• U.S. Retail Pharmacy FY25 sales guidance: $115.0B–$118.0B; International: $23.6B–$24.0B; U.S. Healthcare: $8.6B–$9.0B.