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Walgreens trails consensus in FY24 earnings outlook

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Shares of Walgreens Boots Alliance (NASDAQ:WBA) slipped pre-market Thursday after the pharmacy chain’s earnings outlook released with its Q4 FY23 results fell short of Street forecasts.

The earnings issued days after the appointment of Walgreens’ new CEO, Tim Wentworth indicated that the Deerfield, Illinois-based company expects its FY24 adjusted earnings per share to reach $3.20–$3.50 compared to $3.71 in the consensus.

The company cited the impact of a lower COVID-19 contribution and other factors as headwinds to earnings growth. However, Walgreens (WBA) projects its FY24 to reach $141.0B–145.0B, in line with the consensus of $144.4B, as it counts on its recent foray into healthcare.

“We are also intently focused on accelerating our profitability in the U.S. Healthcare segment,” said interim CEO Ginger Graham ahead of the earnings call at 8:30 a.m. EST.

Following the acquisitions of CareCentrix and Summit Health, WBA’s U.S. Healthcare segment added $2.0B in Q4 FY23 compared to $622M a year ago, with a pro forma growth of 19%. The company expects the segment to breakeven in terms of adj. EBITDA in FY24 at the midpoint of -$50M to $50M of guidance.

Meanwhile, WBA’s U.S. Retail Pharmacy segment added ~$27.7B for the quarter with ~4% YoY growth backed by a comparable sales growth of ~6% YoY.

All in all, Walgreens (WBA) reported $35.4B in sales for the quarter with ~9% YoY growth ahead of expectations, while its adj. earnings disappointed, with a $0.67 loss per share, reflecting a ~16% YoY decline.

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