On Tuesday, Walgreens Boots Alliance Inc ( WBA ) reported fourth-quarter fiscal year 2024 sales of $37.55 billion, up 6% year over year (+6.1% on constant currency), beating the consensus of $35.76 billion, reflecting sales growth across all segments.

Adjusted operating income was $424 million, a decrease of 37.7% on a constant currency basis, reflecting softer U.S. retail and pharmacy performance, lapping the reversal of incentive accruals and prior year sale-leaseback gains, partly offset by cost savings initiatives and improved profitability in the U.S. Healthcare segment.

Adjusted EPS was $0.39, down 40.8%, beating the consensus of $0.36, according to data from Benzinga Pro.

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The U.S. Retail Pharmacy segment sales reached $29.5 billion, up 6.5%. Comparable sales increased 8.3%.

Pharmacy sales increased by 9.6%, and comparable pharmacy sales increased by 11.7% in the fourth quarter, driven by higher brand inflation and mix impacts.

Comparable prescriptions increased by 2.5%, and prescriptions excluding immunizations increased by 2.6% compared to a year ago.

Total prescriptions filled in the quarter, including immunizations, increased 1.7% to 302 million.

Retail sales decreased 3.5%, and comparable retail sales decreased 1.7% compared with the year-ago quarter, reflecting a challenging retail environment and continued channel shift.

The U.S. Healthcare segment’s sales were $2.1 billion, up 7.1% year over year. VillageMD sales increased by 7.2%, reflecting additional risk lives and fee-for-service revenue. Shields grew 27.8%, driven by growth within existing partnerships.

During the earnings release, Walgreens Boots Alliance ( WBA ) announced a footprint optimization program targeting approximately 1,200 closures over the next three years, including approximately 500 closures in fiscal 2025, which will be immediately accretive to adjusted EPS and free cash flow.

The company said it exceeded fiscal 2024 targets for $1 billion in cost savings, a $600 million reduction in capital expenditures, and $500 million in working capital initiatives.

Achieved fiscal 2024 net debt reduction of $1.9 billion and lease obligations reduction of $1.2 billion.

In its third-quarter release, Walgreen Boots Alliance announced the plan to close an undisclosed number of its roughly 8,700 stores.

Guidance: Walgreens Boots Alliance ( WBA ) expects fiscal year 2025 adjusted EPS of $1.40-$1.80 versus consensus of $1.75 and sales of $147 billion-$151 billion versus consensus of $147.28 billion.

The company expects growth in U.S. Healthcare and International more than offset by a decline in U.S. Retail Pharmacy and lower contributions from sale-leaseback and Cencora earnings.

Price Action: WBA stock is up 11.60% at $10.04 at last check Tuesday.

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