03a14739842c65f86909baf81399ea1ea583eda3b15e8366b0d1ddda851b09e0

| Metric (in millions USD) | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| U.S. Retail Pharmacy     | **27,204**  **[0001618921-23-000005_wba-20221130.htm:30]**  | **27,577**  **[0001618921-23-000019_wba-20230228.htm:35]**  | **27,866**  **[0001618921-23-000043_wba-20230531.htm:33]**  | N/A     | **28,944**  **[0001618921-24-000004_wba-20231130.htm:29]**  | **28,861**  **[0001618921-24-000035_wba-20240229.htm:37]**  | **28,503**  **[0001618921-24-000065_wba-20240531.htm:39]**  | **29,470**  **[0001193125-24-237203_d870298dex991.htm:15]**  |
| International            | **5,189**  **[0001618921-23-000005_wba-20221130.htm:30]**   | **5,651**  **[0001618921-23-000019_wba-20230228.htm:35]**   | **5,573**  **[0001618921-23-000043_wba-20230531.htm:33]**   | N/A     | **5,832**  **[0001618921-24-000004_wba-20231130.htm:29]**   | **6,022**  **[0001618921-24-000035_wba-20240229.htm:37]**   | **5,727**  **[0001618921-24-000065_wba-20240531.htm:39]**   | **5,971**  **[0001193125-24-237203_d870298dex991.htm:15]**  |
| U.S. Healthcare          | **989**  **[0001618921-23-000005_wba-20221130.htm:30]**     | **1,634**  **[0001618921-23-000019_wba-20230228.htm:35]**   | **1,975**  **[0001618921-23-000043_wba-20230531.htm:33]**   | N/A     | **1,931**  **[0001618921-24-000004_wba-20231130.htm:29]**   | **2,176**  **[0001618921-24-000035_wba-20240229.htm:37]**   | **2,125**  **[0001618921-24-000065_wba-20240531.htm:39]**   | N/A          |
| Total Revenue            | **33,382**  **[0001618921-23-000005_wba-20221130.htm:30]**  | **34,862**  **[0001618921-23-000019_wba-20230228.htm:35]**  | **35,415**  **[0001618921-23-000043_wba-20230531.htm:33]**  | N/A     | **36,707**  **[0001618921-24-000004_wba-20231130.htm:29]**  | **37,052**  **[0001618921-24-000035_wba-20240229.htm:37]**  | **36,351**  **[0001618921-24-000065_wba-20240531.htm:39]**  | **37,547**  **[0001193125-24-237203_d870298dex991.htm:15]**  |

11b0e9f77e277a411f2dfa74ce6862a180626e2d534d9331a0e72785cc11adba

| Metric (Unit)                                      | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Boots Stores Closed (Number of Stores)             | 244  **[0001618921-23-000005_wba-20221130.htm:38]**  | 252  **[0001618921-23-000019_wba-20230228.htm:14]**  | 261  **[0001618921-23-000043_wba-20230531.htm:13]**  | 291  **[0001618921-23-000062_wba-20230831.htm:68]**  | 364  **[0001618921-24-000004_wba-20231130.htm:37]**  | 484  **[0001618921-24-000035_wba-20240229.htm:11]**  | 581  **[0001618921-24-000065_wba-20240531.htm:11]**  | 624  **[0001618921-24-000065_wba-20240531.htm:11]** **[0001618921-24-000065_wba-20240531.htm:46]**  |
| U.S. Stores Closed (Number of Stores)              | 363  **[0001618921-23-000005_wba-20221130.htm:38]**  | 403  **[0001618921-23-000019_wba-20230228.htm:14]**  | 455  **[0001618921-23-000043_wba-20230531.htm:13]**  | 100  **[WBA_3369890_13]**  | 563  **[0001618921-24-000004_wba-20231130.htm:37]**  | 625  **[0001618921-24-000035_wba-20240229.htm:11]**  | 673  **[0001618921-24-000065_wba-20240531.htm:11]**  | N/A  **[WBA_3402828_16]**  |
| Pre-Tax Charges (USD Billion)                      | 2.4  **[0001618921-23-000005_wba-20221130.htm:39]**  | 2.2  **[0001618921-23-000019_wba-20230228.htm:14]**  | 2.7  **[0001618921-23-000043_wba-20230531.htm:13]**  | N/A  **[0001618921-24-000004_wba-20231130.htm:9]**  | 3.2  **[0001618921-24-000004_wba-20231130.htm:9]**  | 3.4  **[0001618921-24-000035_wba-20240229.htm:11]**  | 3.5  **[0001618921-24-000065_wba-20240531.htm:11]**  | 4.3  **[0001618921-24-000084_wba-20240831.htm:73]** **[0001618921-24-000084_wba-20240831.htm:129]**  |
| Pre-Tax Charges Range (USD Billion)                | N/A      | N/A      | N/A      | 4.1-4.4  **[0001618921-24-000004_wba-20231130.htm:9]**  | N/A      | N/A      | N/A      | N/A      |
| Prescriptions Filled (Million Prescriptions)       | 211.3  **[0001618921-23-000005_wba-20221130.htm:41]**  | 2,197.3  **[0001618921-23-000019_wba-20230228.htm:48]**  | 2,199.9  **[0001618921-23-000043_wba-20230531.htm:45]**  | 1,200  **[0001618921-23-000062_wba-20230831.htm:9]**  | 198.8  **[0001618921-24-000035_wba-20240229.htm:49]**  | 2,198.8  **[0001618921-24-000035_wba-20240229.htm:49]**  | 196.9  **[0001618921-24-000065_wba-20240531.htm:50]**  | N/A  **[0001618921-24-000084_wba-20240831.htm:9]**  |
| 30-Day Equivalent Prescriptions (Million)          | 311.6  **[0001618921-23-000005_wba-20221130.htm:41]**  | 298.0  **[0001618921-23-000019_wba-20230228.htm:48]**  | 304.7  **[0001618921-23-000043_wba-20230531.htm:45]**  | 297  **[0001193125-23-254615_d558457dex991.htm:2]**  | 311.6  **[0001618921-24-000004_wba-20231130.htm:40]**  | 305.7  **[0001618921-24-000035_wba-20240229.htm:49]**  | 306.4  **[0001618921-24-000065_wba-20240531.htm:50]**  | 302  **[0001193125-24-237203_d870298dex991.htm:2]**  |
| Locations at Period End (Number of Locations)      | 8,817  **[0001618921-23-000005_wba-20221130.htm:44]** **[0001618921-23-000005_wba-20221130.htm:41]**  | 8,779  **[0001618921-23-000019_wba-20230228.htm:48]**  | 8,727  **[0001618921-23-000043_wba-20230531.htm:45]**  | 8,720  **[0001618921-23-000062_wba-20230831.htm:72]**  | 8,631  **[0001618921-24-000004_wba-20231130.htm:39]**  | 8,583  **[0001618921-24-000035_wba-20240229.htm:49]**  | 8,595  **[0001618921-24-000065_wba-20240531.htm:54]** **[0001618921-24-000065_wba-20240531.htm:50]**  | 8,560  **[0001618921-24-000084_wba-20240831.htm:64]**  |

de9905c43b88b510078702b62c98692f1adbac232abe0e32b0702dc14e33c84b

| Metric (Unit: Million USD) | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| U.S. Retail Pharmacy       | **27,204**  **[0001618921-23-000005_wba-20221130.htm:31]** **[0001618921-23-000005_wba-20221130.htm:30]**  | **27,577**  **[0001618921-23-000019_wba-20230228.htm:36]**  | **27,900**  **[0001193125-23-175558_d504570dex991.htm:3]** **[0001618921-23-000043_wba-20230531.htm:33]**  | **27,700**  **[0001193125-23-254615_d558457dex991.htm:2]**  | **28,944**  **[0001618921-24-000004_wba-20231130.htm:30]**  | **28,861**  **[0001618921-24-000035_wba-20240229.htm:37]**  | **28,503**  **[0001618921-24-000065_wba-20240531.htm:39]**  | **29,470**  **[0001193125-24-237203_d870298dex991.htm:2]**  |
| U.S. Healthcare            | **989**  **[0001618921-23-000005_wba-20221130.htm:31]** **[0001618921-23-000005_wba-20221130.htm:30]**     | **1,634**  **[0001618921-23-000019_wba-20230228.htm:36]**   | **1,975**  **[0001618921-23-000043_wba-20230531.htm:33]**   | N/A     | **1,931**  **[0001618921-24-000004_wba-20231130.htm:30]**  | **2,176**  **[0001618921-24-000035_wba-20240229.htm:37]**  | **2,125**  **[0001618921-24-000065_wba-20240531.htm:39]**  | **2,110**  **[0001193125-24-237203_d870298dex991.htm:15]**  |
| Total Revenue              | **33,382**  **[0001618921-23-000005_wba-20221130.htm:31]** **[0001618921-23-000005_wba-20221130.htm:30]**  | **34,862**  **[0001618921-23-000019_wba-20230228.htm:36]**  | **35,415**  **[0001618921-23-000043_wba-20230531.htm:33]**  | N/A     | **36,707**  **[0001618921-24-000004_wba-20231130.htm:30]**  | **37,052**  **[0001618921-24-000035_wba-20240229.htm:37]**  | **36,351**  **[0001618921-24-000065_wba-20240531.htm:39]**  | **37,550**  **[0001193125-24-237203_d870298dex991.htm:15]**  |

ab174657e2533389093030924245ae8553337e9ea16ed143904111249ccc6b91

0480bfde5e1deea104ee6cb5ab056b0140f3479480b6f8d6a6e46c717b0bbbe4

88239ca3dcfab26de75eddb50f30a8eeaa0f65034405250d6a82d808a91d28e2

1. Given your plan to close approximately 1,200 stores over the next three years, how do you anticipate this will impact your market share and what specific strategies are in place to retain customers from these underperforming locations?

2. You mentioned the need to stabilize pharmacy margins and address reimbursement pressures; can you elaborate on the concrete steps you're taking to negotiate better terms with PBMs and how confident you are in achieving sustainable reimbursement rates?

3. With the reorientation to a retail pharmacy-led model and investments planned for higher-performing stores, how will you differentiate Walgreens from competitors who have already invested in similar capabilities, and what is your timeline for closing this competitive gap?

4. Considering the ongoing challenges with consumer price sensitivity and declining retail sales, especially in non-essential categories, what specific initiatives are you implementing to drive retail growth and improve gross margins without relying solely on cost-cutting measures?

5. Regarding your intention to monetize non-core assets like VillageMD to strengthen your balance sheet, how will this divestiture affect your long-term healthcare strategy, and what are the potential risks to your growth prospects in the U.S. Healthcare segment?

360dc113b0d72a517faf091a62ca4fbcbf30d6565a82f83744b93ac6de5c0b5d

77d6565fac9407b32148f1467cedce636c1eb7715d4b9a7e1535935dc540ec98

- Chain and independent pharmacies  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Mail order prescription providers  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Grocery stores  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Convenience stores  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Mass merchants  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Online and omni-channel pharmacies and retailers  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Warehouse clubs  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Dollar stores  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Other discount merchandisers  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Pharmaceutical wholesalers  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Importers and manufacturers who supply directly to pharmacies  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Retail healthcare services  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Urgent care services  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Value-based primary care  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Vertically integrated providers  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Post-acute and home health service providers  **[0001618921-24-000084_wba-20240831.htm:15]** 
- Virtual care companies  **[0001618921-24-000084_wba-20240831.htm:15]** 

6fd69a22d3b273d9948832ee428e9030ac5854d1f8d76c2fb3a698f997f52ba6

Boots Stores Closed (Number of Stores)

U.S. Stores Closed (Number of Stores)

Pre-Tax Charges (USD Billion)

Pre-Tax Charges Range (USD Billion)

Prescriptions Filled (Million Prescriptions)

30-Day Equivalent Prescriptions (Million)

Locations at Period End (Number of Locations)

8fe7e2d458bb57378b745410f854b30712475ff7a0b519c5a7c0f781bfa19b6c

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Adjusted EPS**: $1.40 to $1.80  **[WBA_3402828_5]** .
  2. **U.S. Healthcare Segment Adjusted EBITDA**: Improve by $250 million, reaching $280 million to $350 million  **[WBA_3402828_7]** .
  3. **Retail Comparable Sales**: Negative 2% to negative 3%  **[WBA_3402828_7]** .
  4. **Working Capital Initiatives**: Generate approximately $500 million of free cash flows  **[WBA_3402828_7]** .
  5. **Capital Expenditure Reductions**: Approximately $150 million  **[WBA_3402828_7]** .
  6. **AOI Headwind**: Approximately $400 million  **[WBA_3402828_7]** .
  7. **Store Closures**: Close approximately 1,200 stores over three years, with about 500 in fiscal 2025  **[WBA_3402828_6]** .
  8. **Footprint Optimization Program**: In-year benefit of approximately $100 million of AOI  **[WBA_3402828_6]** .
  9. **Legal Payments**: Increase to approximately $1.50 billion  **[WBA_3402828_14]** .
  10. **Pharmacy Margin and Reimbursement Rates**: Continued pressure, with 80% of contract volume negotiated for 2025  **[WBA_3402828_5]** .
  11. **International Segment Profitability**: Expected growth, led by Boots Retail business in Germany  **[WBA_3402828_7]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EPS Guidance for Fiscal Year 2024**: $2.80 to $2.95  **[WBA_3392935_4]** **[WBA_3392935_2]** .
  2. **Retail Comp Sales**: Down approximately 3%  **[WBA_3392935_4]** .
  3. **U.S. Healthcare Segment Adjusted EBITDA**: Breakeven at the midpoint  **[WBA_3392935_4]** .
  4. **Adjusted Effective Tax Rate**: Under 5%  **[WBA_3392935_4]** .
  5. **Fourth Quarter Adjusted EPS**: Approximately $0.39 at the midpoint  **[WBA_3392935_4]** .
  6. **Seasonality Impact**: Fourth quarter is typically the lowest quarter  **[WBA_3392935_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EPS Guidance**: $3.20 to $3.35  **[WBA_3379246_0]** **[WBA_3379246_5]** .
  2. **Retail Comp Sales**: Down approximately 3%  **[WBA_3379246_6]** .
  3. **U.S. Healthcare Segment**: Adjusted EBITDA breakeven, increase of $325 million to $425 million over fiscal '23  **[WBA_3379246_6]** .
  4. **Cost Savings**: $1 billion in cost savings  **[WBA_3379246_2]** .
  5. **Capital Expenditure Reduction**: Reduce by approximately $600 million year-over-year  **[WBA_3379246_5]** .
  6. **Working Capital Improvement**: $500 million  **[WBA_3379246_5]** .
  7. **Adjusted Effective Tax Rate**: Under 5%  **[WBA_3379246_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted EPS Guidance**: Maintained despite challenges  **[WBA_3369760_5]** **[WBA_3369760_1]** .
  2. **Retail Comp Sales**: Decline in low single digits  **[WBA_3369760_6]** .
  3. **Sale and Leaseback Gains**: Reduced by $125 million  **[WBA_3369760_6]** .
  4. **Market Volume Growth for Prescriptions**: Slightly lower than expected  **[WBA_3369760_6]** .
  5. **U.S. Healthcare Segment Adjusted EBITDA**: Breakeven, increase of $325 million to $425 million over fiscal 2023  **[WBA_3369760_6]** .
  6. **Cost Savings**: $1 billion in cost savings  **[WBA_3369760_1]** .
  7. **Capital Expenditures**: Reduce by approximately $600 million year-over-year  **[WBA_3369760_5]** **[WBA_3369760_1]** .
  8. **Working Capital Improvement**: $500 million  **[WBA_3369760_5]** **[WBA_3369760_1]** .
  9. **Tax Rate**: Improved to 15% to 17%  **[WBA_3369760_5]** .

c33df98f7c771425168ef29d6173f3de0b7598c9c7c0baba984edb32db9833a3

| Name                  | Position                                                                 | Start Date          | Short Bio                                                                                                                                                                                                                                                                                                                                                       |
|-----------------------|--------------------------------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Stefano Pessina       | Executive Chairman of the Board                                          | March 2021          | Stefano Pessina has been serving as the Executive Chairman of the Board at Walgreens Boots Alliance since March 2021. He previously served as CEO from July 2015 to March 2021 and has been a director since April 2012  **[0001618921-24-000084_wba-20240831.htm:18]** **[0001308179-23-001069_wba4243631-def14a.htm:30]** **[0001558370-24-015962_tmb-20250130xpre14a.htm:25]** .                                                                                                                            |
| Tim Wentworth         | Chief Executive Officer                                                  | October 23, 2023    | Timothy C. Wentworth has served as the CEO of WBA since October 23, 2023. He previously held leadership roles at Evernorth Health Services and Express Scripts  **[0001558370-24-015962_tmb-20250130xpre14a.htm:27]** **[0001618921-24-000084_wba-20240831.htm:72]** **[0001618921-23-000062_wba-20230831.htm:67]** .                                                                                                                                                                                      |
| Manmohan Mahajan      | Executive Vice President and Global Chief Financial Officer              | March 1, 2024       | Manmohan Mahajan has been the Executive Vice President and Global CFO at WBA since March 1, 2024. He was the Interim Global CFO from July 2023 to March 2024 and has held various roles at WBA since 2016  **[0001618921-24-000084_wba-20240831.htm:72]** **[0001618921-24-000084_wba-20240831.htm:18]** **[0001618921-24-000065_wba-20240531.htm:45]** .                                                                                                                                          |
| Ornella Barra         | Chief Operating Officer, International                                   | April 2021          | Ornella Barra has served as the Chief Operating Officer, International at WBA since April 2021. She was previously Co-Chief Operating Officer from June 2016 to April 2021  **[0001618921-23-000062_wba-20230831.htm:19]** **[0001618921-24-000084_wba-20240831.htm:19]** .                                                                                                                                                                             |
| Mary Langowski        | Executive Vice President and President, U.S. Healthcare                  | March 2024          | Mary Langowski has been the Executive Vice President and President, U.S. Healthcare at WBA since March 2024. She was previously the CEO of Solera Health from July 2020 to March 2024  **[0001618921-24-000084_wba-20240831.htm:19]** **[0001618921-24-000084_wba-20240831.htm:18]** .                                                                                                                                                                  |
| Lanesha Minnix        | Executive Vice President and Global Chief Legal Officer                  | April 2024          | Lanesha Minnix has served as Executive Vice President and Global Chief Legal Officer at WBA since April 2024. She was previously the Executive Vice President, General Counsel, and Corporate Secretary for Ecolab Inc.  **[0001618921-24-000084_wba-20240831.htm:19]** .                                                                                                                                  |
| Elizabeth Burger      | Executive Vice President and Global Chief Human Resources Officer        | March 2024          | Elizabeth Burger has been the Executive Vice President and Global Chief Human Resources Officer at WBA since March 2024. She was previously the Senior Vice President and Chief Human Resources Officer at Flowserve Corporation  **[0001618921-24-000084_wba-20240831.htm:19]** .                                                                                                                         |
| Neal Sample           | Executive Vice President and Chief Information Officer                   | October 2023        | Neal Sample has served as Executive Vice President and Chief Information Officer at WBA since October 2023. He was previously the CIO at Northwestern Mutual  **[0001618921-24-000084_wba-20240831.htm:18]** **[0001618921-23-000099_xslF345X02/wk-form3_1699055368.xml:0]** .                                                                                                                                                                                          |
| Tracey Brown          | Executive Vice President and President, Retail and Chief Customer Officer| January 2024        | Tracey Brown has served as Executive Vice President and President, Retail and Chief Customer Officer at WBA since January 2024. She was previously the Senior Vice President and President of Retail Products and Chief Customer Officer  **[0001618921-24-000084_wba-20240831.htm:20]** **[0001618921-24-000084_wba-20240831.htm:18]** .                                                                                                             |
| Rick Gates            | Senior Vice President and Chief Pharmacy Officer                         | March 2023          | Rick Gates has been the Senior Vice President and Chief Pharmacy Officer at WBA since March 2023. He has been with Walgreens since 1995, holding various roles  **[0001618921-24-000084_wba-20240831.htm:20]** **[0001618921-23-000062_wba-20230831.htm:20]** .                                                                                                                                                                                      |
| Beth Leonard          | Senior Vice President and Chief Corporate Affairs Officer                | January 2024        | Beth Leonard has served as Senior Vice President and Chief Corporate Affairs Officer at WBA since January 2024. She was previously the Senior Vice President and Chief Communications Officer from June 2023 to January 2024  **[0001618921-24-000084_wba-20240831.htm:20]** **[0001618921-24-000084_wba-20240831.htm:18]** .                                                                                                                         |
| William H. Shrank, M.D.| Board Member                                                             | September 1, 2024   | William H. Shrank, M.D., was appointed to the Board of Directors of WBA effective September 1, 2024. He is a venture partner with the Bio + Health Team of Andreessen Horowitz and has extensive experience in healthcare  **[0001193125-24-177307_d834203d8k.htm:1]** .                                                                                                                                |

fb6a0ea2899f3da2125c6ebaa6220cab196c16d8a7f40251e46fab373de3a173

| Program Details           | Program 1          |
|---------------------------|--------------------|
| Approval Date             | June 2018  **[0001618921-24-000084_wba-20240831.htm:93]** **[0001618921-24-000084_wba-20240831.htm:67]** **[0001618921-24-000084_wba-20240831.htm:163]** |
| End Date/Duration         | No specified expiration date  **[0001618921-24-000084_wba-20240831.htm:93]** **[0001618921-24-000084_wba-20240831.htm:67]** **[0001618921-24-000084_wba-20240831.htm:163]**  |
| Total additional amount   | **$10.0 billion**  **[0001618921-24-000084_wba-20240831.htm:93]** **[0001618921-24-000084_wba-20240831.htm:67]** **[0001618921-24-000084_wba-20240831.htm:163]**  |
| Remaining authorization   | **$2.0 billion** as of August 31, 2024  **[0001618921-24-000084_wba-20240831.htm:93]** **[0001618921-24-000084_wba-20240831.htm:67]** **[0001618921-24-000084_wba-20240831.htm:163]**  |
| Details                   | The program aims to offset anticipated dilution from equity incentive plans. It was suspended in July 2020, but there is no specified expiration date, and the company may continue repurchases.  **[0001618921-22-000064_wba-20220831.htm:87]** **[0001618921-23-000062_wba-20230831.htm:87]** **[0001618921-24-000084_wba-20240831.htm:93]** **[0001618921-23-000062_wba-20230831.htm:58]** **[0001618921-22-000064_wba-20220831.htm:57]**  |

f87f316b6884053c348377d990b74c0b39426429477c137258333a725bae14bc

**Annual guidance for FY 2025:**
- **Adjusted EPS**: $1.40 to $1.80  **[WBA_3412284_5]**  (no change from prior guidance $1.40 to $1.80  **[WBA_3402828_5]** )  
- **Retail Comparable Sales**: Decline of approximately 4% to 5%  **[WBA_3412284_5]**  (lowered from negative 2% to negative 3%  **[WBA_3402828_7]** )  
- **Footprint Optimization Program AOI Benefit**: $100 million  **[WBA_3412284_5]**  (no change from prior guidance $100 million  **[WBA_3402828_6]** )  
- **Working Capital Initiatives**: $500 million  **[WBA_3412284_5]**  (no change from prior guidance $500 million  **[WBA_3402828_7]** )  
- **Capital Expenditures Reduction**: Ahead of target for $150 million reduction  **[WBA_3412284_5]**  (no change from prior guidance $150 million  **[WBA_3402828_7]** )  
- **NADAC Changes Impact**: Less than $50 million negative impact  **[WBA_3412284_5]**  (no prior guidance)  

7f9b11d092413c240c6a3a9d5549432fd9dfbf2eb79b1abfd507376fbbfadd3c

WBA’s Healthcare segment soared in Q1, with Shields driving strong profit growth and MFCs now covering 4,500+ stores. Front-end retail declined due to pressured spending. Store closures (70 of 500) aim at $100M in annual OI, but reimbursement challenges persist.

2a660b1387d86d5b90dc44ba8b341cd8b434adc7b1ee9c72d413534c261b909e

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 2002  **[0001618921-24-000084_wba-20240831.htm:170]**  | Present  | Current auditor   |

346419f2ac612d62760484bfdd1abb4528c3c169b5b1f585c6950286244118c2

U.S. Retail Pharmacy

International

- Germany

- United Kingdom

- Other

U.S. Healthcare

Walgreens Health

Corporate and Other

Pharmaceutical Wholesale

Eliminations

Total Revenue

de679edf4d574f3d2a599237d050c536388682a250c6b9b1eceff9b47d9e2ed3

- Pharmacy

- Retail

- Wholesale

8ecc39143c2460fb65c6ec19cbcb846218c1a724f8e44f9ff33a86182b123363

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $39.459B (+7% YoY from $36.707B)  **[0001618921-25-000009_wba-20241130.htm:28]** **[0001618921-24-000004_wba-20231130.htm:38]**   
- U.S. Retail Pharmacy: $30.866B (+7% YoY from $28.944B)  **[0001618921-25-000009_wba-20241130.htm:22]** **[0001618921-24-000004_wba-20231130.htm:30]**   
- International Segment: $6.425B (+10% YoY from $5.832B)  **[0001618921-25-000009_wba-20241130.htm:22]** **[0001618921-24-000004_wba-20231130.htm:30]**   
- U.S. Healthcare: **$2.172B (+13% YoY from $1.931B)**  **[0001618921-25-000009_wba-20241130.htm:22]** **[0001618921-24-000004_wba-20231130.htm:30]**   
- Net Income: **-$265M** (vs. -$67M in Q1 2024)  **[0001618921-25-000009_wba-20241130.htm:28]** **[0001618921-24-000004_wba-20231130.htm:38]**   

d6ae045252e85ee61599c38bfc999c82bd92112dea9ecf6fc93d86b22e70498e

1. **Reimbursement Pressure and Contracts**  
   **Q:** Are actions reducing 2025 reimbursement pressure?  **[WBA_3412284_8]**   
   **A:** Yes, we're seeing **reduced pressure** in 2025 compared to previous years due to restructuring our contracts with PBMs. We've rebalanced brand and generic reimbursements and aligned with PBMs to create categories for higher-cost drugs like GLP-1s. This new construct provides stability today and positions us for better visibility and improvement in future years.  **[WBA_3412284_7]** **[WBA_3412284_8]** 

2. **Free Cash Flow and CapEx**  
   **Q:** Can you talk about confidence in positive free cash flow?  **[WBA_3412284_12]**   
   **A:** We're broadly in line with our previous commentary and feel good about working capital improvements. We achieved higher-than-expected reductions in capital expenditures in the quarter, exceeding our target of **$150 million**. While not sharing specific guidance, we're confident in our ability to improve operating performance over time, which will positively impact free cash flow.  **[WBA_3412284_12]** 

3. **Procurement and Cencora Partnership**  
   **Q:** How are you maximizing procurement with Cencora?  **[WBA_3412284_10]**   
   **A:** We're working closely with Cencora to modernize our drug purchasing processes to be **world-class**. While we haven't built any changes into our fiscal 2025 expectations, we're engaging with them to incrementally and transformationally improve procurement, which will benefit both parties as our volumes increase.  **[WBA_3412284_10]** 

4. **Store Closures and Footprint Optimization**  
   **Q:** Will footprint optimization impact grow over time?  **[WBA_3412284_11]**   
   **A:** We're on track to close **500 locations** in fiscal year 2025, having closed about **70 stores** in the quarter. The annualized operating income benefit is expected to be **$100 million** this year. As we continue this plan over three years, these benefits will scale over time.  **[WBA_3412284_11]** 

5. **Peer's Cost-Plus Model Impact**  
   **Q:** Does peer's cost-plus model offer opportunities?  **[WBA_3412284_11]**   
   **A:** The peer's announcement didn't surprise us; it's similar to what we've been doing in our contracts by realigning brand and generic reimbursements. We are willing to help payers win in configurations that work for them, aiming for a sustainable pharmacy model.  **[WBA_3412284_11]** 

6. **Healthcare Segment Performance**  
   **Q:** Which healthcare subsegments outperformed?  **[WBA_3412284_12]** **[WBA_3412284_13]**   
   **A:** **VillageMD** had a great quarter, growing off a smaller focused platform after facility closures. **Shields** saw strong revenue and profit growth with very high client renewals. **CareCentrix** also performed well, selling through new relationships, contributing to the overperformance.  **[WBA_3412284_13]** 

7. **Merchandising Strategy Execution**  
   **Q:** How are you addressing front-end pressures?  **[WBA_3412284_15]**   
   **A:** We're executing several initiatives, including revamping our team, enhancing our loyalty program, and introducing new categories like superfoods, sports nutrition, and women's wellness. We've launched over **60 own-brand items** this quarter to meet customers' needs with the right products at the right prices.  **[WBA_3412284_15]** 

8. **Timing of Stabilizing Free Cash Flow**  
   **Q:** When will you stabilize free cash flow?  **[WBA_3412284_13]**   
   **A:** While not providing multi-year cash flow guidance today, we're focused on improving operating performance over time. Factors like operating improvements, CapEx reduction, working capital streamlining, and lower legal payments will positively impact future cash flows from fiscal **2026** onwards.  **[WBA_3412284_13]** 

9. **Recontracting Impact on Pharmacy Costs**  
   **Q:** How will recontracting affect pharmacy costs?  **[WBA_3412284_14]**   
   **A:** Changing reimbursement structures isn't inherently a cost increase or decrease; it depends on negotiations. We haven't seen a cost increase ourselves. Our focus is on managing specialty pharmacy costs by ensuring the right patients receive the right drugs, which helps manage overall pharmacy costs effectively.  **[WBA_3412284_14]** 

10. **Micro Fulfillment Centers Rollout**  
    **Q:** What's the plan for micro fulfillment centers?  **[WBA_3412284_12]**   
    **A:** We're pleased with the progress, operating over **4,500 stores** through micro fulfillment centers now, aiming to reach **6,000 stores** in the next 12 months. This enhances efficiency and allows store staff to focus on higher-value activities like patient counseling.  **[WBA_3412284_12]** 

11. **Script Retention Amid Store Closures**  
    **Q:** How is script retention during store closures?  **[WBA_3412284_7]**   
    **A:** Script retention has been **better than expected**. We track it internally, and our new processes have improved patient experience when their store closes, leading to successful transfers to receiving stores.  **[WBA_3412284_7]** 

e0da06f92595c3e10774eee00e5da04474bee542fe30058c87387fcd64047d79

| Year   | Amount Due [Billions] | Debt Type              | Interest Rate [%] | % of Total Debt |
|--------|-----------------------|------------------------|-------------------|-----------------|
| 2025   | 0.446                | Short-term debt        | N/A               | 5.5% = (0.446 / 8.1) * 100 **[0001618921-25-000009_wba-20241130.htm:44]** |
| 2025   | 2.4                  | Operating lease obligations | N/A           | 29.6% = (2.4 / 8.1) * 100 **[0001618921-25-000009_wba-20241130.htm:44]** |
| 2025   | 0.091                | Finance lease obligations | N/A            | 1.1% = (0.091 / 8.1) * 100 **[0001618921-25-000009_wba-20241130.htm:44]** |
| 2026   | 2.8                  | Long-term debt         | 2.125            | 34.6% = (2.8 / 8.1) * 100 **[0001618921-25-000009_wba-20241130.htm:44]** **[0001618921-25-000009_wba-20241130.htm:0]** |
| 2027   | 1.8                  | Long-term debt         | N/A               | 22.2% = (1.8 / 8.1) * 100 **[0001618921-25-000009_wba-20241130.htm:44]** |

79c5dae23fa72e8b8fe3f9f14ef8fd995b9bfb25d89fbc350816169bf07e778e

1e5eed53e42d9bc8cbbe89ff56e2c65f06c0d52ee1118060aa4a1d281a551dc9

1. **Reimbursement Rates**  
   **Q:** Do we expect improving rates in 2025?  
   **A:** Tim stated that in fiscal 2025, they anticipate a lessening of reimbursement pressure.  **[WBA_3402828_9]**  They have 80% visibility on contracts and are having constructive conversations with payers and PBMs.  **[WBA_3402828_9]**  They are open to making difficult decisions, including walking away from unprofitable business if necessary.  **[WBA_3402828_9]** 

2. **Store Closures Impact**  
   **Q:** How will store closures affect earnings in '25?  
   **A:** Manmohan noted they expect to close around **500 stores**, weighted towards the back half of fiscal '25.  **[WBA_3402828_10]**  The benefits from these closures will scale within '25 and continue over the next three years.  **[WBA_3402828_10]** 

3. **Dividend Sustainability**  
   **Q:** Is the current dividend sustainable?  
   **A:** Tim explained they are adopting a flexible and pragmatic capital allocation strategy.  **[WBA_3402828_16]**  They will continually evaluate their situation and may adjust the dividend to align with long-term earnings if appropriate.  **[WBA_3402828_16]**  **Everything is on the table**.  **[WBA_3402828_16]** 

4. **VillageMD Monetization**  
   **Q:** What's the plan for monetizing VillageMD?  
   **A:** Tim acknowledged they aim to monetize VillageMD but want to avoid destroying value unnecessarily.  **[WBA_3402828_20]**  The process is complex and requires careful consideration to preserve value.  **[WBA_3402828_20]**  They are engaged and will proceed methodically.  **[WBA_3402828_20]** 

5. **Free Cash Flow Outlook**  
   **Q:** Where will free cash flow be for FY25?  
   **A:** Manmohan indicated adjusted operating income will decline in '25 due to lower sale-leaseback contributions and lower earnings from Cencora, but these do not impact free cash flow.  **[WBA_3402828_14]**  Legal payments will slightly increase to about **$1.5 billion**.  **[WBA_3402828_14]**  They plan to offset headwinds with working capital optimization of around **$500 million** and reducing CapEx by about **$150 million**.  **[WBA_3402828_14]** 

6. **Working Capital Improvements**  
   **Q:** Can you break down the working capital improvement?  
   **A:** Manmohan said they are optimizing all components of the cash conversion cycle.  **[WBA_3402828_18]**  Initiatives include removing unproductive inventory, optimizing Rx inventory via micro-fulfillment centers, improving accounts receivable collection, and adjusting accounts payable timing.  **[WBA_3402828_18]**  Store closures will also generate free cash by optimizing inventory within the remaining network.  **[WBA_3402828_18]** 

7. **Earnings Cadence in U.S. Pharmacy**  
   **Q:** What's the earnings cadence in U.S. Pharmacy for '25?  
   **A:** Manmohan expects the cadence to be similar to the last couple of years.  **[WBA_3402828_13]**  No significant changes are anticipated; first half versus second half should align with previous trends.  **[WBA_3402828_13]** 

8. **Cost Reduction Initiatives**  
   **Q:** What other margin improvements are planned beyond cost cuts?  
   **A:** Tim emphasized they are focused on continuous cost optimization, including addressing stranded costs from store closures.  **[WBA_3402828_19]**  They see opportunities to improve efficiency across the business, particularly at the corporate level.  **[WBA_3402828_19]**  Investments will continue in stores and associates.  **[WBA_3402828_19]** 

9. **Recapture Rate Post Store Closures**  
   **Q:** How much Rx and foot traffic will you retain post closures?  
   **A:** Tim stated there's no one-size-fits-all number, but they are precise in store-level assumptions.  **[WBA_3402828_16]**  They leverage loyalty programs and digital engagement to retain customers.  **[WBA_3402828_16]**  They aim to serve every patient but are realistic in their models.  **[WBA_3402828_16]** 

10. **Vendor Contracts Negotiations**  
    **Q:** Any updates on renegotiating vendor contracts?  
    **A:** Tim mentioned they have a long-term arrangement with Cencora until 2029 and meet regularly to explore opportunities.  **[WBA_3402828_12]**  They are having meaningful and constructive dialogues to find ways to grow together, but no specific updates were provided.  **[WBA_3402828_12]** 

db6515c6c14f30b9043da0d5738ce234508363512abf0428399ed5c6a1e4d708

- The U.S. Healthcare segment, including VillageMD and Shields Health Solutions, is showing strong revenue and profit growth, indicating potential for continued expansion and profitability in this segment. Shields Health Solutions had a "terrific quarter" with strong client renewals and increasing profit margins.  **[WBA_3412284_13]**
- The company's investments in micro fulfillment centers (MFCs) are improving operational efficiency, reducing costs, and enhancing the in-store experience. Over 4,500 stores are now being serviced by MFCs, with plans to expand to 6,000 stores, leading to increased ability to counsel patients and provide higher-order clinical services that bring additional reimbursements.  **[WBA_3412284_12]**
- Walgreens is successfully renegotiating pharmacy benefit manager (PBM) contracts to improve reimbursement rates, particularly for higher-cost drugs, and is rebalancing brand and generic pricing to better reflect the current environment, which should enhance pharmacy margins. Additionally, they are achieving better-than-expected prescription retention during store closures, indicating they can improve profitability by closing underperforming stores without significant customer loss.  **[WBA_3412284_7]**

5f40247fe17ace615cf4c6ee72261736bbf5677adfc76f4954fd81adb7251801

- **Walgreens anticipates slower prescription market growth**, expecting overall market growth to slow down roughly **50 basis points** versus previous estimates.  **[WBA_3369760_15]**
- **Ongoing reimbursement pressure** in the pharmacy sector is squeezing margins, with Walgreens acknowledging there's "very little left" to absorb further cuts, indicating potential challenges to profitability.  **[WBA_3369760_13]**
- Walgreens is **closing approximately 200 stores** this year to optimize their footprint, reflecting challenges in their core retail business and potential declines in store performance.  **[WBA_3369760_10]**

9860a4a2edc201feec7302f634b5e5f3a056c6b631af57da0a7755bf56284153

- **Persistent challenges in the U.S. Retail Pharmacy segment, particularly in the front-end retail business, due to continued deterioration in consumer discretionary spending and shifting consumer behavior.** The company notes that the consumer remains under pressure from accumulated inflation and higher interest rates, impacting discretionary categories and leading to a decline in comparable retail sales.  **[WBA_3412284_13]** **[WBA_3412284_15]**
- **Uncertainty in achieving long-term positive cash flow generation amid ongoing operational and financial challenges.** The company acknowledges that while they improved free cash flow in the quarter, they have more work to do to strengthen their balance sheet and ensure longer-term positive cash flow. They are not providing multiyear cash flow guidance and mention that higher legal payments and planned investments are impacting cash flow.  **[WBA_3412284_13]** **[WBA_3412284_12]** **[WBA_3412284_11]**
- **Ongoing reimbursement pressures in the pharmacy business, with the company stating that despite progress in contract negotiations for 2025, there is "still a ton to do" over the next several years.** This suggests that reimbursement pressures may continue to impact profitability in the pharmacy segment.  **[WBA_3412284_7]** **[WBA_3412284_8]**

3f8467b0f65abcc572f5076a256768f2e24a7906431467665d3793127346e5ff

1. **Reimbursement Model and Margins**  
   **Q:** Can Walgreens drive new reimbursement models and sustainable margins?  
   **A:** Walgreens believes it can play a significant role in shifting the reimbursement model by partnering with PBMs and health plans, focusing on value beyond unit cost ( **[WBA_3369760_8]** ). The sustainable margin per drug will largely depend on the **services provided to patients**, and Walgreens is confident in building value through its pharmacy services ( **[WBA_3369760_8]** ).

2. **Strategic Focus and Core Business**  
   **Q:** What is considered core to Walgreens' business and strategic focus?  
   **A:** The core business centers around the **community-based retail stores**, which are not on the table for change ( **[WBA_3369760_9]** ). Walgreens plans to optimize its footprint by closing about **200 stores** this year ( **[WBA_3369760_9]** ). Key focus includes expanding pharmacy services, leveraging assets like CareCentrix and Shields, and investing in a **health services strategy** rather than acquiring more primary care assets ( **[WBA_3369760_9]** ).

3. **Specialty Pharmacy Opportunities**  
   **Q:** What opportunities exist for Walgreens in specialty pharmacy?  
   **A:** Walgreens sees significant potential in specialty pharmacy by leveraging its assets and partnerships like Shields ( **[WBA_3369760_11]** ). They are building capabilities in **gene and cell therapy** and have secured wins with large **Blue Cross Blue Shield plans** ( **[WBA_3369760_11]** ). Shields is a key enabler in their specialty strategy, working with health systems to manage patients and build networks ( **[WBA_3369760_11]** ).

4. **Investment in Care Delivery Partnerships**  
   **Q:** Will Walgreens expand access to care through partnerships like Pearl?  
   **A:** Yes, Walgreens intends to pursue more partnerships to expand access to care ( **[WBA_3369760_12]** ). They view investments like **VillageMD** as platforms to build and test services, and aim to be a preferred partner in various geographies ( **[WBA_3369760_12]** ).

5. **Reimbursement Pressure and Floor on Unit Costs**  
   **Q:** Has reimbursement pressure reached a floor, and can Walgreens drive fair reimbursement?  
   **A:** While there is very little left to cut in unit costs, Walgreens doesn't claim a floor has been reached ( **[WBA_3369760_13]** ). They believe that transitioning to a **value-based model** will help both PBMs and retailers, and they aim to help PBMs win by being a great payor partner ( **[WBA_3369760_13]** ).

6. **Timeline for Implementing New Reimbursement Models**  
   **Q:** How long will it take to implement new reimbursement models?  
   **A:** Material changes could occur within **a year or two**, with quicker uptake possible for mid-year small group sales ( **[WBA_3369760_14]** ). Employers' demand for transparent benefits is driving this change, and Walgreens aims to be paid fairly for the services they provide ( **[WBA_3369760_14]** ).

7. **Pharmacy Market Growth Expectations**  
   **Q:** Why are pharmacy market growth expectations lower now?  
   **A:** The overall prescription market growth is expected to slow by about **50 basis points** compared to previous estimates ( **[WBA_3369760_15]** ). This is driven by a **weaker respiratory season** and the continued impact of **Medicaid redetermination** ( **[WBA_3369760_15]** ).

8. **Owning a PBM vs. Partnering**  
   **Q:** Should Walgreens own a PBM to benefit its business?  
   **A:** Walgreens does not see owning a PBM as the best path ( **[WBA_3369760_15]** ). They prefer to remain **independent** and work across the ecosystem, leveraging the value that large PBMs bring through scale ( **[WBA_3369760_15]** ).

9. **Lilly Direct Program Impact**  
   **Q:** How will Lilly's new Lilly Direct program impact Walgreens?  
   **A:** Walgreens is open to participating and can work within various reimbursement models ( **[WBA_3369760_16]** ). They support programs that increase **transparency** and lower drug costs for consumers, aiming to collaborate with partners like Lilly ( **[WBA_3369760_16]** ).

10. **Pay-for-Performance Contracts**  
    **Q:** What's the focus and opportunity in pay-for-performance contracts?  
    **A:** Most pay-for-performance contracts are currently in **Medicare Part D**, with expansion into **Medicaid** and potentially commercial space ( **[WBA_3369760_17]** ). Walgreens' ability to deliver on these contracts enhances credibility and opens up further opportunities ( **[WBA_3369760_17]** ).

11. **Market Share Opportunities in Cost-Plus Model**  
    **Q:** Can Walgreens gain market share with the cost-plus model?  
    **A:** Walgreens aims to differentiate by leveraging its **trusted brand** and other assets to gain share ( **[WBA_3369760_18]** ). They can compete on unit price but seek to stand out through services and patient engagement, helping them to gain market share ( **[WBA_3369760_18]** ).

02d0a03bc48f6003eec20f1541577e96bd109fe5df259929209bddbfa1ed6e17

- **WBA's investment in VillageMD is progressing well**, with VillageMD realigning costs and focusing on growth and profitability, indicating a strong strategic investment for WBA.  **[WBA_3369760_10]**
- **WBA is strengthening its core community-based retail pharmacy model**, investing in technology and services to expand in-store offerings and enhance patient engagement, positioning the company for sustained growth.  **[WBA_3369760_9]**
- **WBA plans to expand through strategic partnerships with care providers**, like VillageMD and others, to grow access to care in different geographies, enhancing growth prospects.  **[WBA_3369760_12]**

d8a026ccfecd430735a83e54c74af5b84b29b5e3aad1365e6cce62283230474b

- **Persistent challenges in U.S. consumer spending and retail pharmacy margins are negatively impacting Walgreens Boots Alliance's financial performance, with the company noting that the consumer environment remains challenging, leading to investments in pricing and promotions that have reduced retail gross margins.**  **[WBA_3392935_12]** **[WBA_3392935_16]** **[WBA_3392935_11]** **[WBA_3392935_9]** **[WBA_3392935_7]**
- **Pharmacy margins are under pressure due to several factors including reimbursement pressures, fluctuations in NADAC pricing, and lower script volume growth, which are expected to continue into fiscal 2025, potentially hindering profitability recovery.**  **[WBA_3392935_12]** **[WBA_3392935_16]** **[WBA_3392935_15]** **[WBA_3392935_11]** **[WBA_3392935_9]**
- **The planned closure of a significant portion of underperforming stores (**25%** of the store network) over the next three years indicates operational challenges and may lead to disruptions in revenue and customer base, raising concerns about the company's market coverage and competitive position.**  **[WBA_3392935_6]** **[WBA_3392935_7]** **[WBA_3392935_10]**

bc662439379bf4c38d241d14dae8d2e8bd907e1d93a644dd83215f714b8f7696

1. **Store Closures Impact**  
   **Q:** What is the financial impact of closing underperforming stores?  
   **A:** Closing underperforming stores will lead to accretion both on cash flow and adjusted EPS.  **[WBA_3392935_13]**  We retain nearly all prescriptions from closed stores  **[WBA_3392935_13]** , and we will reduce fixed costs accordingly.  **[WBA_3392935_13]**  We are conducting detailed analyses to ensure we maintain appropriate coverage for payers and customers.  **[WBA_3392935_14]** 

2. **Cash Flow Expectations**  
   **Q:** What are the free cash flow expectations for Q4 and 2025?  
   **A:** We expect positive free cash flow in Q4, similar to the third quarter.  **[WBA_3392935_15]**  Boosting cash flow is a top priority, and all actions outlined will continue to improve our cash flow position.  **[WBA_3392935_15]**  We will provide detailed guidance for fiscal 2025 in October.  **[WBA_3392935_16]** 

3. **Gross Margin Outlook**  
   **Q:** Can you explain the low retail gross margin and outlook?  
   **A:** The gross margin was impacted by investments in price and promotions due to a challenging consumer environment.  **[WBA_3392935_11]**  This trend is expected to continue into Q4.  **[WBA_3392935_11]**  Pharmacy margins were affected by fluctuations in NADAC, generic launches with branded-like procurement dynamics, and unfavorable brand mix.  **[WBA_3392935_11]** 

4. **Earnings Guidance for Fiscal 2025**  
   **Q:** Are we looking at earnings in the low $2 range for 2025?  
   **A:** We are not providing specific earnings guidance for 2025 at this time.  **[WBA_3392935_16]**  However, we anticipate approximately **$0.75** headwind due to the wind-down of the sale leaseback program, sale of Cencora shares, and a more normalized tax rate.  **[WBA_3392935_16]**  We expect profitability growth in our U.S. Healthcare and International segments.  **[WBA_3392935_16]** 

5. **Future of Pharmacy and Reimbursement**  
   **Q:** What is your view on the future of pharmacy and reimbursement models?  
   **A:** We are transforming both the front and back of the store to meet consumers where they are.  **[WBA_3392935_9]**  This includes optimizing store footprint, enhancing loyalty programs, and automating pharmacy workflow.  **[WBA_3392935_9]**  We are collaborating with PBMs to change outdated reimbursement models and ensure fair payment for the value pharmacists provide.  **[WBA_3392935_9]** 

6. **Prescriptions Below Pre-Pandemic Levels**  
   **Q:** Why are prescriptions not back to pre-pandemic levels?  
   **A:** The market has slowed due to Medicaid redetermination, with **18 to 20 million** individuals losing coverage.  **[WBA_3392935_12]**  Patients have not picked up new coverage as quickly, leading to reduced utilization.  **[WBA_3392935_12]**  We are growing with the market, which is currently running below pre-pandemic growth rates.  **[WBA_3392935_12]** 

7. **U.S. Healthcare Strategy**  
   **Q:** What is the forward strategy for U.S. Healthcare regarding value-based care?  
   **A:** We strongly believe in value-based care and will continue to be an investor in VillageMD.  **[WBA_3392935_17]**  We plan to focus on capital-light services and partner across the industry with providers and payers.  **[WBA_3392935_17]**  We are stopping activities that don't fit this focus or create near-term value.  **[WBA_3392935_17]** 

8. **Retention of Prescriptions from Closed Stores**  
   **Q:** How much of the prescriptions will you retain from closed stores?  
   **A:** We retain nearly all prescriptions from closed stores.  **[WBA_3392935_13]**  Our experience from closing **2,000** locations over the last **10 years** gives us confidence in retention rates.  **[WBA_3392935_13]** 

9. **Payer Conversations and Reimbursement**  
   **Q:** Have any payers agreed to terms that help stabilize things?  
   **A:** We are in collaborative discussions with PBM partners to reshape reimbursement models.  **[WBA_3392935_15]**  There is an understanding that the old playbook is outdated, and incentives need to be better aligned.  **[WBA_3392935_15]** 

10. **Leases and Cash Flow Impact**  
    **Q:** Can you exit long-term leases of closed stores?  
    **A:** Many stores are on favorable corners, allowing us to minimize lease carry costs when closing.  **[WBA_3392935_10]**  We are engaging differently to reduce lease overhangs, and this is part of our economic analysis.  **[WBA_3392935_10]** 

8a359baae0b6eadf2a7b3f1776e2078d777faf0c32a531d8dc5289a50adc4a41

- **Walgreens Boots Alliance lowered its full-year adjusted EPS guidance due to a challenging U.S. retail environment, with fiscal 2024 retail comparable sales now expected to be down approximately 3%.**  **[WBA_3379246_7]** **[WBA_3379246_6]** **[WBA_3379246_10]** **[WBA_3379246_17]**
- **The company recognized a $5.8 billion after-tax noncash goodwill impairment charge related to its investment in VillageMD, due to the closure of approximately 160 clinics and slower-than-expected trends, affecting profitability and growth prospects of the health care segment.**  **[WBA_3379246_3]**
- **Walgreens is winding down its sale-leaseback program, removing a previous source of gains, and does not anticipate any material benefit going forward, resulting in headwinds to adjusted operating income.**  **[WBA_3379246_6]** **[WBA_3379246_4]** **[WBA_3379246_10]** **[WBA_3379246_17]**

92af8a63fec5524f49cad81cb9258a9b79f96235a425dba535c1a9e350cf2074

- **Walgreens Boots Alliance is proactively exploring new reimbursement models**, including cost-plus models, and engaging constructively with PBMs and payers, potentially enhancing profitability.  **[WBA_3379246_15]** **[WBA_3379246_8]** **[WBA_3379246_9]**
- **Cost savings initiatives are on track to achieve $1 billion in savings this year**, primarily in the U.S. Retail Pharmacy segment, improving the company's cost structure and enhancing cash flow.  **[WBA_3379246_6]** **[WBA_3379246_17]**
- **The leadership team is reviewing every business to maximize growth potential and generate cash flow**, focusing on simplifying and strengthening WBA, which could unlock value and enhance shareholder returns.  **[WBA_3379246_7]** **[WBA_3379246_17]** **[WBA_3379246_14]**

0128cffc69c460da50193ccca9fe62b3158ae00cde22363935ec45bb2e190853

- **WBA is focusing on margin improvement through growth initiatives such as specialty pharma services, data analytics, and specialty pharmacy, which are expected to drive near-term shareholder value creation.**  **[WBA_3402828_21]**
- **The company has strengthened its leadership team by hiring Jason, a new Chief Commercial Officer with relevant value-based care experience, to drive commercialization, B2B partnerships, and services development.**  **[WBA_3402828_21]**
- **WBA is making progress in restructuring pharmacy reimbursement rates, with lessening reimbursement pressure expected in 2025 and constructive negotiations with PBMs to ensure fair compensation, which should positively impact financial performance over the next few years.**  **[WBA_3402828_9]**

c79b940cc9d184004fc270a8856d4b4940cde2de3f96d39f149ad8f733694966

- **Persistent reimbursement pressure** in the pharmacy business is expected to continue affecting operating income, with negotiations still ongoing and willingness to **exit unprofitable contracts**.  **[WBA_3402828_16]**
- **Plans to close approximately 1,200 stores over the next three years**, including about **500 in fiscal 2025**, reflect significant challenges in retail operations and may lead to revenue loss despite efforts to **recapture customers**.  **[WBA_3402828_6]** **[WBA_3402828_16]**
- **Turnaround initiatives and growth strategies are in early stages and not expected to contribute to financial performance in the near term**, indicating continued pressure on earnings.  **[WBA_3402828_21]** **[WBA_3402828_3]**

b5079f3e13a86b43e2e19f426494ee432ca0b9d67ee21c8fc1fdcae52716acd5

1. **Fiscal '25 Outlook**  
   **Q:** Can you discuss the progression into '25 and guidance?  
   **A:** The company is not providing fiscal '25 guidance at this time. They are working on a strategic review with the executive team and a detailed 3-year plan, which they will share in the next 3 to 6 months. They expect continued growth in U.S. health care, with Village focusing on core markets and ongoing cost actions. Factors like U.S. health care growth, cost savings, retail expectations, and seasonality will impact '25.  **[WBA_3379246_8]** 

2. **Reimbursement Models and Profit Growth**  
   **Q:** What's the timing for new reimbursement models to boost profit?  
   **A:** The company is having constructive conversations with payers and PBMs about new reimbursement models and creating value for payers. They acknowledge that structural changes will take multiple years and are working with their distributor to reconfigure their partnership.  **[WBA_3379246_8]** **[WBA_3379246_9]** 

3. **VillageMD Closures and Capitation**  
   **Q:** What is the outlook for VillageMD closures and capitation model?  
   **A:** VillageMD has closed 140 locations and is focusing on core markets. Payers and health systems are interested in working with Walgreens to drive medical expense savings, leveraging their unmatched consumer reach.  **[WBA_3379246_8]** 

4. **Retail Segment and Own Brands**  
   **Q:** How quickly can you implement own brand expansion and realign national brands?  
   **A:** The company is accelerating own brand expansion rapidly, launching **37 new products** in Q2. Changes like increasing shelf depth and store reach for own brands can be done quickly, while new product innovation takes longer.  **[WBA_3379246_10]** 

5. **Vaccines and Pharmacy Services Contribution**  
   **Q:** Can you split the contribution between pharma services, front end, and pharmacy?  
   **A:** They are not prepared to break out contributions quantitatively but state that vaccines and test-and-treat services are very meaningful to overall pharmacy reimbursements and growth.  **[WBA_3379246_10]** 

6. **Direct Relationships with Pharma**  
   **Q:** Can you comment on potential direct relationships with pharma companies like Lilly Direct?  
   **A:** The company believes they are a natural partner for pharma companies wanting to go direct to patients when the normal supply chain isn't effective. They have relationships with every American and with every pharma company, offering a clinically aligned partnership.  **[WBA_3379246_12]** 

7. **PBM Reimbursement Changes Impact**  
   **Q:** Did PBM reimbursement changes affect cash flows or cadence?  
   **A:** They are not seeing a negative impact on reimbursement due to PBM changes. Any potential negative impacts are offset by performance-based contracts where they can overperform.  **[WBA_3379246_13]** 

8. **Portfolio Strategy and Unlocking Value**  
   **Q:** How are you thinking about the portfolio and unlocking value?  
   **A:** The company is conducting an intense review of every asset in their portfolio. They are willing to make difficult decisions and are committed to ensuring each asset advances their expansion into health care's fastest-growing areas.  **[WBA_3379246_15]** 

9. **Retail Decline and Same-Store Sales**  
   **Q:** Are you seeing changes in same-store script economics in H2?  
   **A:** They expect to grow in line with the market and hold share in script growth. They continue to see a challenging retail environment and have lowered expectations to a **negative 3% comp** for the full year.  **[WBA_3379246_17]** 

47fc0c98925832d76350a8d97f6faf052ba50152f2ab8624923ef3c25621cdc1

- **Walgreens Boots Alliance is actively restructuring to enhance operational efficiency and profitability**, including plans to optimize its store footprint by closing underperforming locations (approximately **25% of stores**), investing in store experience, and leveraging automation to improve back-end operations.  **[WBA_3392935_6]** **[WBA_3392935_7]** **[WBA_3392935_14]**
- **The company is engaging in constructive negotiations with PBMs and payers to reshape reimbursement models**, aiming to be fairly compensated for the value provided and improve pharmacy margins.  **[WBA_3392935_12]** **[WBA_3392935_15]** **[WBA_3392935_9]**
- **Walgreens is focusing on strengthening its customer relationships through an expanded loyalty program and enhanced pharmacy services**, leveraging its large customer base of over **120 million myWalgreens members**.  **[WBA_3392935_7]** **[WBA_3392935_9]**

ec93f3f8f24695926ee081bfd39276dd184856b12c4f15b431f96651618b5cc3

Walgreens Boots Alliance Inc (WBA)

Financials