Walgreens Boots Alliance, Inc. has recently released its 10-Q report, which provides an in-depth look into the company's financial condition and operations. Walgreens Boots Alliance, Inc. operates as a healthcare, pharmacy, and retail company in the United States, Germany, the United Kingdom, and internationally. It operates through three segments: U.S. Retail Pharmacy, International, and U.S. Healthcare. The U.S. Retail Pharmacy segment engages in the operation of the retail drugstores, health and wellness services, specialty, and home delivery pharmacy services, offering a range of health and wellness, beauty, personal care, and general merchandise products. The International segment offers similar products outside the United States and operates pharmacy-led health and beauty retail businesses under various brand stores. The U.S. Healthcare segment provides various healthcare services, including VillageMD, Shields, and CareCentrix.
In the 10-Q report, under "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations," it was noted that as of November 30, 2024, Walgreens Boots Alliance had cash, cash equivalents, and restricted cash totaling $1.3 billion, a decrease from $3.2 billion as of August 31, 2024. The company's short-term investment objectives are primarily to minimize risk and maintain liquidity, with investments principally in U.S. Treasury money market funds. Walgreens Boots Alliance continues to explore strategic monetization of non-core assets and other investments to provide additional liquidity. The report also highlighted the company's outstanding total debt of $8.1 billion as of November 30, 2024, of which $446 million was classified as current. The company is exploring opportunities to obtain additional debt or other financing and amend or extend existing borrowings in anticipation of the debt maturities and expiration of revolving credit facilities expected in fiscal 2026 and 2027.
The report further discussed the company's outstanding total operating lease obligations of $22.7 billion and total finance lease obligations of $1.0 billion as of November 30, 2024. It was mentioned that the company announced the end of the sale-leaseback program beginning in fiscal 2025 and is now focused on managing and reducing its outstanding lease obligations through initiatives such as the Footprint Optimization Program.
Regarding cash flows, the report indicated that net cash used for operating activities was $140 million for the three months ended November 30, 2024, primarily driven by seasonal inventory build in the U.S., UK, and Germany, and legal payments of $137 million. Net cash used for investing activities was $76 million, including sale proceeds of $129 million related to the company’s sale of BrightSpring common stock, offset by additions to property, plant, and equipment of $284 million. Net cash used for financing activities was $1.7 billion, with $3.2 billion in proceeds from debt and $4.7 billion in payments of debt made primarily for revolving credit facilities.
The report also discussed the company's credit ratings, noting that as of January 9, 2025, the credit ratings of Walgreens Boots Alliance were Ba3 from Moody’s and BB-B from Standard & Poor’s, both with a stable outlook. In fiscal 2024, the company’s long-term ratings were downgraded below investment grade. The report highlighted that the reduction in the company’s credit ratings has limited impact to the cost of interest on existing debt but has minimally increased borrowing margins under certain credit facilities. As a result of these announcements, the company's shares have moved 27.5% on the market, and are now trading at a price of $11.76. Check out the company's full 10-Q submission here.
