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Walgreens chips away at capex to boost free cash flow in fiscal 2024
By Devika Patel
Knoxville, Tenn., April 1 – Walgreens Boots Alliance, Inc. reported that it is working on improving cash flow by decreasing capital expenditures.
The company decreased capex by $250 million in the first half of this fiscal year and expects to deliver a $600 million reduction in capex for the full year, which will further increase free cash flow.
Free cash flow for the quarter was negative $610 million, a $1.3 billion decrease compared with the year-ago quarter. Free cash flow for the first six months of the year was negative $1.4 billion, a $2 billion decrease compared with the year-ago period.
Capital expenditures for the last quarter decreased by $146 million compared to the year-ago quarter. Capital expenditures for the first six months of fiscal 2024 decreased by $250 million compared to the year-ago period.
“We are working to improve cash flow by prioritizing projects and capital spend,” chief executive officer Tim Wentworth said on the company’s second quarter ended Feb. 29 earnings conference call on March 28.
“Capital expenditures declined by $250 million versus the first half of fiscal 2023,” executive vice president and global chief financial officer Manmohan Mahajan said on the call.
“As a result, free cash flow was down by approximately $2 billion versus the prior year.
“We expect second half free cash flow improvement compared to the first half,” Mahajan said.
“We are on track to deliver a $600 million reduction [in capex] for the full year,” Wentworth said.
Cash and cash equivalents were $668 million as of Feb. 29, 2024, compared to $739 million as of Aug. 31, 2023.
Long-term debt was $7,535,000,000 as of Feb. 29, 2024, compared to $8,145,000,000 as of Aug. 31, 2023.
Short-term debt was $1,937,000,000 as of Feb. 29, 2024, compared to $917 million as of Aug. 31, 2023.
Walgreens is an integrated health care, pharmacy and retail company based in Deerfield, Ill.
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