Walgreens (WBA) earnings Q1 2024

Shares of Walgreens fell more than 11% on Thursday after the company reported fiscal first-quarter adjusted earnings and revenue that topped expectations, but cut its quarterly dividend nearly in half. 

The retail pharmacy giant slashed its dividend to 25 cents per share from 48 cents per share to “strengthen [its] long-term balance sheet and cash position,” CEO Tim Wentworth, who officially took the helm during the quarter, said in a statement. 

Walgreens’ dividend yield is now 3.9%, based on Wednesday’s closing price. That’s down significantly from its prior yield of more than 7%, which made the company the highest-paying dividend stock in the Dow Jones Industrial Average. 

It also marks the company’s first dividend cut in nearly five decades. The dividend will be payable on March 12.

In an interview with CNBC, Wentworth called the dividend cut an “incredibly important and responsible” decision. 

He added that the majority of investors expected the move and “actually are excited about the fact that we’re going to have additional capital to invest in the core business in a way that stimulates growth again, because that ultimately is going to be the most shareholder-friendly thing we can do.”

The dividend reduction comes as Wentworth, a health-care industry veteran, tries to steer the company out of a rough spot. 

Shares of Walgreens plummeted 30% last year as the company grappled with weakening demand for Covid products, low pharmacy reimbursement rates, increased pressure from online retailers, labor unrest among pharmacy staff in the fall, an uneven push into health care and a challenging macroeconomic environment.

But Thursday’s earnings beat marks a turnaround from October, when Walgreens missed earnings estimates for two straight quarters for the first time in nearly a decade.

Here’s what Walgreens reported for the three-month period ended Nov. 30 compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as…