Drugstore chain Walgreens cuts quarterly dividend to get more cash to grow its business

Walgreens is chopping its dividend nearly in half as the drugstore chain looks to strengthen its balance sheet

Walgreens-Dividend Cut (Copyright 2023 The Associated Press. All rights reserved)

Walgreens is chopping its dividend nearly in half as the drugstore chain looks to strengthen its balance sheet.

The health care giant said Thursday that reducing its quarterly payout to shareholders to 25 cents per share will help free up capital to spend growing its pharmacy and health care businesses.

New CEO Tim Wentworth said in a statement that company leaders believe such growth “will ultimately improve shareholder value.”

Company shares jumped in early-morning trading after Walgreens also announced a better-than-expected fiscal first quarter.

Walgreens Boots Alliance Inc. runs a network of around 13,000 drugstores globally. Most of its locations are in the United States, where its locations are becoming growing sources for care.

The company is working with VillageMD to open primary care practices next to some locations with the idea that drugstores and doctor offices work together to help keep patients healthy. But drugstores remain Walgreens’ main business.