Good morning, everyone. Welcome to the Walgreens Boots Alliance Q4 2024 earnings call. I'm Tiffany Kanaga, and joining me today are Tim Wentworth, our CEO; Manmohan Mahajan, our CFO; Mary Langowski, President of U.S. Healthcare; Rick Gates and Tracey Brown, retail leaders. We will discuss our forward-looking statements and financial measures, which are available on our website. Thank you for your interest in Walgreens Boots Alliance. Now, over to Tim for our performance insights.
This quarter highlights our execution amid tough consumer conditions. Since joining, my goals have been setting a strong management team, refining controllable elements for financial enhancement, and a strategic asset assessment for long-term growth. Our short-term targets were cutting costs by over $1 billion, lowering capital expenses by $700 million, and realizing $600 million from working capital strategies, resulting in positive cash flow.
We're focused on retail pharmacy as our core strength, leveraging trust and relevance. Our goal is convenience and accessibility, leading to an expanded store optimization plan. Out of over 8,000 stores, 6,000 are profitable, enabling strategic investments in these outlets. Meanwhile, underperforming stores will close, reducing fixed costs. We intend to close around 1,200 stores in three years, realigning to a dynamic market.
Our adjusted focus includes a merchandise strategy shift, offering targeted products, and expanding our brands. We're launching over 600 new owned-brand products in 2024-2025. Our disciplined financial model emphasizes free cash flow and leverage control. 2025's target is $500 million in working capital savings and further capex cuts, alongside asset monetization like VillageMD and public equity shares.
Our vision lies in stabilizing pharmacy margins, advancing retailer strategy, and improving debt positions. Negotiations with PBM partners aim for fair reimbursement, coupled with visibility on script volumes for 2025. We are confident in the strategic rightsizing for sustainable pharmacy economics and our turnaround strategy.
Let’s address the detrimental impacts, such as recent hurricanes affecting over 1,000 stores, with efforts ongoing to restore services. Walgreens raised $5 million for relief efforts, asserting our community commitment. We now turn to Manmohan for financial results.
Our Q4 and full-year results are as anticipated, with U.S. retail pharmacy experiencing challenges offset by healthcare growth. Adjusted EPS fell 41% year-on-year due to external monetary pressure but was buoyed by cost-cutting and healthcare performance.
Internationally, Germany and Boots performed stably with growing sales. In the U.S., pharmacy sales saw growth, buoyed by prescription volume increases but hampered by competitive pressures. We exceeded our cost-saving targets, notably through retail pharmacy declines buffered by rationalizing investments and cost savings.
Looking ahead, growth in U.S. healthcare and international sectors brings optimism. We aim to tackle reimbursement pressures smartly, align strategies with evolving market conditions, and leverage strengths in healthcare services through Shields and VillageMD. Discipline in financial operations and capital expenditures support robust free cash flow generation over time.
Assets like specialty pharmacy and related healthcare partnerships are pivotal while pursuing growth initiatives such as improved drug procurement, broader pharmacy services, and logistical efficiencies. Our culture fosters constant improvement in operating efficiencies, driving profitability while enhancing customer experiences—strengthening the balance sheet and net asset yield from initiatives like working capital and capex efficiency will lead to sustainable financial health.
Forward-thinking capital strategy focuses on aligning with strategic imperatives to optimize our extensive footprint, rationalize inventory, and maintain a lean cost structure, enhancing financial resiliency to accommodate growth and market dynamics.
Q&A followed with investors inquiring about strategic execution, contract negotiations, and financial improvement forecasting. Management underscored ongoing efforts to solidify market presence, engage in transformative partnerships, and optimize resource allocations toward maximizing shareholder value while maintaining a steadfast focus on operational excellence and strategic clarity.
