Walgreens Boots Alliance announced on Thursday that it was suspending his practice of paying cash dividends to stockholders – for the first time it will not pay the quarter dividend in 92 years.
This change has come in the midst of a struggle for the dearfield-based retail pharmacy giants. Walgreens announced plans to close 1,200 stores in the next three years including Chicago in October. Walgreens has been cutting costs over years, including trimmed in Illinois and other locations.
Walgreens said in a news release on Thursday that he was suspending the quarterly dividend “as the management continues to evaluate and refine its capital allocation policy to suit the company’s broad long -term turnaround attempts.”
Before now, Walgreens Boots Alliance and its preceding company, Walgreen CO. The stockholders paid 368 consecutive quarters or a quarterly dividend for 92 years.
Walgreens said that the purpose of change is to improve the finance of Walgreens by reducing the loan over time and improving cash flow. Valgrens said in the release, “In the next several years, the company’s cash needs, in relation to litigation and debt refinance, were important ideas as part of the decision to suspend dividends.”
With a net deficit of $ 67 million during the same quarter of the previous year, Valgrace suffered a net loss of $ 265 million in the first quarter of this year.
Under the previous CEO, Walgreens had targeted to become more as a health care destination, including investing billions of dollars with a plan to keep village medical clinics in 1,000 stores by 2027 in 1,000 stores by plans to keep village medical clinics in 1,000 stores by 2027 Was. The plan, securities and exchange commission, is saying in a August filing with the Commission that she was considering selling all of her or her villaged business. Current CEO Tim Ventaworth has said that Valgrain wants to refocus when it is a “retail-pharmacy-LED company”.
Walgreens has also fought for years with issues related to drug reimbursement and changing consumer habits among other challenges.
Although the company suffered net damage in its most recent quarter, some of the operating losss belonged to the cost of closing the store, and sales increased by 7.5% in the quarter compared to the same quarter of the previous year.
“While our turnout will take time, our initial progress confirms our trust in a permanent, retail pharmacy -led operating model,” Ventaworth said in a news release about earning earlier this month.
It is no surprise that Valgrace selected his dividend to suspend his dividend as a manner to free cash, pay loans and focus on fixing its operation, a senior of Edward Jones Equity analyst John Boylan wrote to investors in a note on Thursday.
Jones wrote in the note, “We see it as a prudent step to improve our cash flow and financial structure.” “Overall, we believe that the turnout strategy of management appears sound, but it will take time and is not without risk in a highly competitive drugstore industry.”