Walgreens Boots Alliance Slashes FY23 Adj. EPS Outlook; Stock Down 7% - Update
(RTTNews) - While reporting financial results for the third quarter on Tuesday, Walgreens Boots Alliance, Inc. (WBA) slashed its adjusted earnings guidance for the full-year 2023 to a range of $4.00 to $4.05 per share from the prior forecast range of $4.45 to $4.65 per share, reflecting challenging consumer and macroeconomic conditions, and lower COVID-19 vaccine and testing volumes.
On average, 16 analysts polled by Thomson Reuters expect the company to report earnings of $4.46 per share for the year. Analysts' estimates typically exclude special items.
The company said the fourth quarter is expected to be negatively impacted by a higher effective tax rate, shifting U.S. consumer spending with heightened macro pressures, and the impact of a weaker respiratory season for both U.S. Retail Pharmacy and U.S. Healthcare.
For the fiscal year 2024, Walgreens Boots Alliance is providing preliminary expectations for low- to mid-single digit adjusted operating income growth, with the U.S. Healthcare and U.S. Retail Pharmacy performance more than offsetting headwinds from lower sale and leaseback program benefits, lower COVID-19 contribution, and the sale of holdings in AmerisourceBergen.
The company also raised its Transformational Cost Management Program target to $4.1 billion from $3.5 billion in cumulative savings by fiscal 2024. It is also expecting cost savings of $800 million in fiscal 2024.
The Company said its capital allocation continues to focus on core investments, debt paydown, and dividend payments.
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