The Walgreens shares sank on Friday, the day after the drugstore chain announced that he suspended his dividend, breaking a series of three -month payments from shareholders who stretched for over 90 years.
The drugstore chain said late Thursday that he made a decision in an effort to strengthen his balance sheet and improve the free cash flow while the company leaders were trying to turn around The job that fights.
Walgreens deals with a thin recipe return, growing costs, permanent theft and customers sensitive to inflation that they seek offers elsewhere. Company is at an early stage Plan to close 1,200 of its approximately 8,500 US locations.
In a brief statement on Thursday, the company announced that the needs for money over the next few years that things like litigation and refinancation of debt were large parts of the Dividend Suspendering Decision.
Earlier this month, US Ministry of Justice filed a lawsuit In the federal court, accusing the drug chain of fulfilling millions of recipes without legitimate purposes, including some of the dangerous amounts of opioids.
In September, The company said He would pay $ 106 million to settle separate litigation for false payments.
Walgreens started last year Removing a quarterly dividend Almost half. The company reduced the payment to 25 cents with 48 cents after spending about $ 1.7 billion on financial dividends in the fiscal 2023.
Main Mammohan Makhajan Financial Director told analysts earlier this month that Walgreens still evaluates “the suitability and size of our dividend as part of our capital distribution policy.”
The suspension was “cautious and a little too late,” analyst Leerink Partners Michael Cherny said on Thursday in a research note. He added that they split “became remote” in terms of their yield and money they needed.
Last year, there were only two dividends suspensions at the S&P 500, including one of the Intel factors. There are usually only a few each year.
Dividend Suspension “sends a signal to the whole world to have a problem, which is a cash flow and is not in the short term,” said Howard Silverblatt, an older Index analyst at S&P Dow Jones Indecs.
But he added that markets often see the suspension of dividends as a positive sign because the company recognizes that it has problems and takes a step to correct it.
Gabelli is funded by portfolio manager Jeff Jonas said last fall that Walgreens is probably another decrease in dividends.
“The balance is slowly improved, but that still has to improve,” he said.
The company is said to have paid off financial dividends each quarter since 1933, which is a railway that stretched over 90 years or almost 370 straight fourth.
