Investing.com -- Walgreens Boots Alliance (NASDAQ:WBA) has posted first-quarter income that topped analysts expectations thanks to strong demand at its pharmacy business and international segments.
The Illinois-based company, which has been attempting to slash costs to offset weaker discretionary spending by customers as well as lower contributions from COVID-19 vaccines and testing, also lowered its quarterly dividend by 48% to $0.25.
In a statement, Chief Executive Officer Tim Wentworth called the decision "difficult," but said it was necessary to "strengthen our long-term balance sheet and cash position."
Wentworth, who was tapped to take the helm of the drugstore chain operator in October, added that the move will also free up capital to invest in Walgreens' pharmacy and healthcare businesses.
"We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow, with a balanced approach to capital allocation priorities," Wentworth said.
Adjusted earnings per share decreased by 43.1% to $0.66 in the three months ended on Nov. 30, yet still beat Bloomberg consensus estimates of $0.62. Sales of $36.71 billion were also above projections despite a "challenging" retail market environment and headwinds from a higher tax rate.
For its 2024 fiscal year, Walgreens maintained its outlook for adjusted per-share profit of $3.20 to $3.50. Analysts had called for guidance of $3.32.
Shares in Walgreens rose in premarket trading in New York on Thursday.