DEERFIELD, Ill. & SAN FRANCISCO - Walgreens has partnered with Instacart (NASDAQ:CART) to allow Supplemental Nutrition Assistance Program (SNAP) beneficiaries to use their Electronic Benefit Transfer (EBT) payments for online purchases. This collaboration enables SNAP/EBT acceptance for same-day delivery from over 7,500 Walgreens stores nationwide, including over 100 Duane Reade locations in New York.
The initiative aims to improve food access for communities, with over 40 million people in the U.S. currently receiving SNAP/EBT benefits. This service removes the transportation barrier for customers, providing a more convenient shopping experience. Walgreens and Instacart's partnership reflects a shared commitment to enhancing customer access to essential items.
To utilize this service, customers can visit Instacart's website or mobile app, select the Walgreens or Duane Reade storefront, add items to their cart, and choose the amount of SNAP benefits they wish to use at checkout. This integration is part of Walgreens' efforts to create omnichannel solutions and improve in-store efficiencies.
Instacart's Vice President and General Manager of Health, Sarah Mastrorocco, remarked on the expansion with Walgreens, expressing pride in helping more families receive essential deliveries. Balachandra Visalatha, SVP and chief product officer at Walgreens, emphasized the company's dedication to offering a relevant and efficient customer experience.
The partnership is based on a press release statement and reflects the broader efforts of both companies to serve the needs of SNAP families, enhance their shopping experience, and promote better health outcomes through increased access to food and essentials.
In other recent news, Walgreens has been awarded up to $25 million to conduct a Phase IV observational study on COVID-19 vaccine effectiveness, funded by the Biomedical Advanced Research and Development Authority. This study is part of the Rapid Response Partnership Vehicle and aims to leverage Walgreens' extensive network of community pharmacies to improve access and diversity in clinical trials.
In terms of financial performance, Walgreens' third-quarter earnings for the fiscal year 2024 revealed an adjusted earnings per share (EPS) of $0.63, falling short of expectations. This led to a revised full-year outlook of $2.80 to $2.95 EPS. In response, several analyst firms, including RBC Capital Markets, TD Cowen, Truist Securities, and Mizuho Securities, adjusted their price targets for Walgreens shares, while maintaining their respective ratings.
Walgreens has added healthcare strategy expert Dr. William H. Shrank to its board of directors, amid a series of executive appointments aimed at enhancing the company's healthcare expertise. This move follows a challenging fiscal year due to industry headwinds.
The company is implementing strategic measures to improve its financial performance and market position, which includes accelerated store closures, reconfiguring retail experiences, simplifying U.S. healthcare operations, and considering closing up to 25% of its stores based on cash flow analysis.
InvestingPro Insights
Walgreens Boots Alliance (NASDAQ:WBA) demonstrates a commitment to community support and customer convenience through its SNAP/EBT integration with Instacart. This initiative might appeal to socially conscious investors, but it is also essential to consider the company's financial health when evaluating its stock.
InvestingPro data shows a challenging financial picture for WBA, with a negative P/E ratio of -1.6, suggesting that the company has reported a loss in earnings. This is further reflected in the adjusted P/E ratio for the last twelve months as of Q3 2024, which stands at -12.47. Despite revenue growth of 6.92% during the same period, reaching $145.53 billion, the company's profitability metrics, such as the operating income margin of 1.29%, indicate that it is facing challenges in converting sales into profits.
One of the InvestingPro Tips highlights that WBA's dividend yield is substantially high at 9.33%, which could be attractive to income-seeking investors. However, this comes with a significant decrease in dividend growth, down by 47.92% for the last twelve months as of Q3 2024, raising questions about the sustainability of such dividend payouts in the long term.
Another tip points out that WBA's stock has experienced considerable volatility, with a year-to-date price total return of -57.9% and a 1-year price total return of -61.64%. The stock is currently trading at 35.91% of its 52-week high, with a previous close price of $10.72.
Investors looking for a deeper dive into the financials and future outlook of Walgreens can find additional insights and tips on InvestingPro, where there are currently 15 more tips available to help inform investment decisions. The platform also provides a fair value estimate of $15.49 for WBA, higher than the analyst target of $12.96, indicating potential undervaluation.
It's important to note that while the partnership with Instacart shows Walgreens' adaptability and customer focus, the InvestingPro data underscores the need for investors to carefully weigh the social impact against the backdrop of the company's current financial performance.
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