Walgreens Stock (NASDAQ: WBA) Plummets After Earnings Miss – Down 50% YTD

Walgreens Boots Alliance stock (NASDAQ:WBA) experienced a significant shakeup , as shares tumbled 22% on Thursday, hitting lows not seen in decades. This dramatic drop came on the heels of the pharmacy retail chain's earnings report, which fell short of Wall Street's expectations and prompted a reduction in the company's full-year financial outlook.

The overall trend on the stock has been resoundingly bearish over the past year, and with barely half of 2024 having been completed, the price of WBA shares has fallen by more than 50%.

The fiscal third-quarter financials revealed that Walgreens' revenue saw a year-over-year increase of 2.6%, reaching $36.4 billion, with its domestic retail pharmacy segment contributing $28.5 billion to the figure. Nevertheless, the revenue surge was overshadowed by a sharp 36.6% slump in earnings per share (EPS), which settled at 63 cents down from the previous year.

Analysts had set their sights on revenue estimates of $35.9 billion and an earnings benchmark of 68 cents per share, a projection Walgreens failed to meet. This discrepancy between expected and actual performance heightened investor concerns, leading to the stock's value depreciation.

Walgreens CEO Tim Wentworth pinpointed the primary issues contributing to the financial mishap. He highlighted the current obstacles faced within the U.S. consumer environment as well as compressing pharmacy margins. These challenges have evidently put pressure on the company’s profitability and overall fiscal health.

In response to the underwhelming results, Walgreens revised its full-year earnings guidance downward. The new forecast anticipates EPS to be in the range of $2.80 to $2.95, a decrease from prior expectations that projected figures between $3.20 and $3.35.

Nevertheless, the consensus recommendation remains a Hold, suggesting that investors are advised to maintain their positions amid market uncertainty.

Amidst this financial turbulence, Walgreens faces the challenge of navigating an evolving retail landscape, marked by competitive threats and shifting consumer behaviour. The company's capacity to adapt to these conditions will likely be a factor in its long-term stock performance and market position.