Shares of Walgreens Boots Alliance (NASDAQ: AMB) fell sharply last year as a combination of declining vaccine demand, headwinds to consumer discretionary spending and misguided acquisitions led to a string of dismal earnings reports for the company.

As a result, Walgreens was forced to cut its dividend, take a multibillion-dollar impairment charge and lose its place in the Dow Jones Industrial Average (DJINDEXES: ^DJI). According to data from S&P Global Market Intelligencethe stock fell 64% throughout 2024. As you can see from the chart, the stock fell steadily for most of the year as its outlook continued to decline.

Walgreens fell steadily through the first three quarters of the year as the company missed estimates and cut guidance, and Wall Street’s view of the stock deteriorated. In the fourth quarter, stocks appeared to stabilize, but had yet to show signs of recovery.

The trouble started early for Walgreens, as it said it was cutting its dividend in early January when it reported first-quarter earnings. The company cut its dividend by 48% to $0.25 in the quarter, which it said was part of a focus on right-sizing costs and increasing cash flow. It also kept its EPS guidance at $3.20 to $3.50 at the time.

In its second-quarter report, released at the end of March, Walgreens dropped another bombshell on investors, with a $5.8 billion goodwill impairment at VillageMD. It acquired the primary care and urgent care business as a way to diversify and vertically integrate, but has been seen to have grossly overpaid for the business. Walgreens paid $5.2 billion in 2021 to increase its stake in VillageMD from 30% to 63%, even though its growth strategy in the business didn’t work. It also lowered its adjusted EPS guidance to $3.20-$3.35 for the quarter.

Walgreens’ worst day of the year came on June 27, when shares fell 22% on another disappointing earnings report. This time, it lowered its full-year EPS guidance to $2.80-$2.95 due to challenging trends in the pharmaceutical industry and a weak consumer environment.

Just about everything that could go wrong for Walgreens last year did, but it showed signs of recovery in its first-quarter earnings report earlier this month. While management expects adjusted earnings per share of $1.40 to $1.80 this year, the business appears to have stabilized and the top line is growing.

For dividend investors, Walgreens is attractive right now, offering a dividend yield of 10.9%, which should be safe if the business has stabilized.

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