Walgreens Boots (WBA) surged early Tuesday after the retail pharmacy chain reported slightly better-than-expected fourth-quarter earnings and revenue while also announcing plans to close 1,200 locations over the next three years, including around 500 closures in fiscal 2025.
The drug store giant saw Q4 EPS fall 42% to 39 cents per share while revenue increased 6% to $37.54 billion. Analyst consensus had earnings coming in at 36 cents per share on sales totaling $35.75 billion.
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Walgreens added in its earnings release Tuesday that it plans to close about 1,200 stores in the next three years, with a large portion coming in fiscal 2025. The drug store chain said program will be “immediately accretive to adjusted EPS and free cash flow.”
In June, Walgreens had said it would cut a significant share of its U.S. stores over three years.
Looking to fiscal 2025, Walgreens projects EPS of $1.40-$1.80, a 37%-50% earnings decline compared to 2024. The company forecast revenue around $147 billion-$151 billion in fiscal 2025. Walgreens sees growth opportunities in its U.S. healthcare and international segments and expects that to “more than offset by a decline in U.S. retail pharmacy, a higher adjusted effective tax rate and lower contributions from sale-leaseback and Cencora earnings.”
WBA stock jumped more than 12% to 10.11 during market action on Tuesday. On Monday, Walgreens stock dropped 2.3%. Walgreens stock has crated 65% in 2024, falling from 26.11 at the end of 2023, hitting a multidecade low of 8.22 in late September before rebounding to its current trading level. WBA shares have been meeting resistance at its tumbling 50-day moving average for much of 2024.
Walgreens stock has a 2 Composite Rating out of a best-possible 99. Shares also have a 6 Relative Strength Rating and a 31 EPS Rating.
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