On October 12, 2023, Walgreens Boots Alliance Inc (WBA, Financial) released its financial results for the fiscal year and fourth quarter that ended on August 31, 2023. Despite facing challenges, the company has taken several steps to align its cost structure with its business performance.
Financial Performance and Challenges
Interim Chief Executive Officer Ginger Graham stated that the company's performance this year did not reflect WBA's strong assets, brand legacy, or commitment to its customers and patients. In just six weeks, the company has planned cost reductions of at least $1 billion and lowered capital expenditures by approximately $600 million. The impact of these actions is anticipated to be seen in fiscal 2024, starting from the second quarter.
Financial Achievements
WBA's fourth quarter sales increased by 9.2% from the year-ago quarter to $35.4 billion, reflecting sales growth in the U.S. Retail Pharmacy and International segments, and sales contribution from the U.S. Healthcare segment. The net loss in the fourth quarter was $180 million compared to a net loss of $415 million in the year-ago quarter, primarily driven by a lower operating loss.
Income Statement, Balance Sheet, and Cash Flow Statement
For the fiscal year 2023, sales were $139.1 billion, an increase of 4.8% from the year-ago period. The operating loss in fiscal 2023 was $6.9 billion compared to operating income of $1.4 billion in the year-ago period. The net loss in fiscal 2023 was $3.1 billion, compared with net earnings of $4.3 billion in the year-ago period. The loss per share for fiscal 2023 decreased to $3.57, compared with EPS of $5.01 in the year-ago period.
Company's Performance Analysis
The company's U.S. Retail Pharmacy segment had fourth quarter sales of $27.7 billion, an increase of 3.7% from the year-ago quarter. The International segment had fourth quarter sales of $5.8 billion, an increase of 12.4% from the year-ago quarter. The U.S. Healthcare segment had fourth quarter sales of $2.0 billion, reflecting the acquisition of CareCentrix, the acquisition of Summit Health by VillageMD, and pro forma growth in all businesses.
Fiscal 2024 Outlook
For fiscal 2024, Walgreens Boots Alliance expects adjusted EPS of $3.20 to $3.50 reflecting incremental cost savings across the business and accelerating profitability in U.S. Healthcare, more than offset by lower sale and leaseback contribution, a higher tax rate, and lower COVID-19 contribution.
