If you’re tired of the dark days and long nights characteristic of winter, you might like the fireworks this earnings season is about to display.
We’re jumping in this week with tickers like GS, MS, PNC, KEY, AA and JBHT, to name a few.
The first four are in the Financial sector (XLF), which has held up pretty well in this sideways January market. Will it continue? I’m not sure, but let’s take a look at Walgreens Boots Alliance Inc. (Nasdaq: WBA).
A Deep Dive
Walgreens announced a 48% reduction in its quarterly dividend payments back on Jan. 4.
Why? To free up capital. For what?
“This action will free up capital to invest in driving sustainable growth in the pharmacy and healthcare businesses, as well as paying down debt,” – CEO Tim Wentworth said at the time.
Here’s how the stock responded:
Wentworth said a few very key words: healthcare and debt.
Healthcare
“We are building a gene and cell therapy because pharma has essentially indicated strong interest in working with us,” Wentworth emphasized.
On Lilly Direct (go ahead, Google that… Eli Lilly (LLY)…
“So, is it an opportunity? Absolutely, and we certainly would support and work with Lilly on that,” Walgreens Chief Pharmacy Officer Rick Gates said.
Oh my! The whole world is about to get skinny!
Debt
“We are taking swift actions to right-size costs and increase cash flow…” to the tune of $1 billion in cost savings.
“Our U.S. organizational efforts have resulted in a planned headquarters support office workforce reduction of approximately 20%,” Wentworth said.
Ouch! Bye-bye employees.
Consumers
Let’s talk about those employees. Actually, let’s talk about employees in general… aka the consumers.
Here’s what Walgreens said about them (I mean, Walgreens? Who really shops at Walgreens? I’d say that’s why you need to pay attention.).
“We are navigating the accumulating consumer pressures from inflation and depleted savings and somewhat slower than anticipated market trends… Retail customers in the United States are under stress and making deliberate choices to seek value,” Wentworth said.
“Customers continue to pull back on discretionary spending and actively seek out promotional opportunities. As a result, we saw an approximately 90 basis points impact from weaker holiday seasonal sales.” Walgreens Interim CFO Manmohan Mahajan said.
Insiders
So how did Wentworth respond?
Source: www.secform4.com
He bought 10,000 shares the very next day. Now go back and read the entire article.
Think and win!
Celeste Lindman
Celeste Lindman Trading
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*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
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