Walgreens Boots Alliance has suspended its quarterly cash dividend as it reassesses capital allocation amid a long-term turnaround effort.
Eight things to know:
1. Walgreens shares plunged nearly 16% Jan. 31 after the company suspended its dividend, ending over 92 years of quarterly payout, according to the Chicago Tribune.
2. The move aims to strengthen Walgreens' balance sheet by reducing debt and improving free cash flow. The company considered its cash needs for litigation and debt refinancing over the next few years in making the decision.
3. Walgreens said its leadership remains focused on its strategic priorities and financial discipline to drive long-term value.
4. The company posted a $245 million operating loss in the first quarter of fiscal 2025, the three months ending Nov. 30, a substantial drop from the $39 million operating loss recorded in the same quarter in FY 2024. "While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model," CEO Tim Wentworth said.
5. Walgreens had been in talks to sell to private equity firm Sycamore Partners and become private, but an acquisition is unlikely to be announced, according to The Wall Street Journal.
6. Earlier this month, the Justice Department sued Walgreens for alleged unlawful dispensation of millions of prescriptions in violation of the Controlled Substances Act. That lawsuit potentially complicated talks between Walgreens and Sycamore Partners.
7. In the fourth quarter of last year, Walgreens said that it planned to close about 1,200 retail stores over three years, including around 500 in fiscal 2025.
8. Walgreens reported an operating loss of $978 million in the fourth quarter of 2024, up 117.1% compared to the same period in 2023.