Walgreens (WBA) Q1 2025 Earnings

Walgreens on Friday reported better-than-expected fiscal first-quarter profits and sales as it closed stores and cut other costs to get out of trouble.

Below is a comparison of what Walgreens reported for the three months ended Nov. 30 with Wall Street expectations, based on a survey of analysts by LSEG.

Earnings per share: 51 cents adjusted, 37 cents expected; Revenue: $39.46 billion, $37.36 billion expected.

Even after the big turnaround, Walgreens kept its 2025 adjusted earnings outlook unchanged at $1.40 to $1.80 per share. The company did not include full-year sales guidance in its release. Walgreens announced in October that it expects fiscal year sales to be between $147 billion and $151 billion.

The company’s shares soared 27% on Friday.

“Despite a challenging backdrop for consumers, we continue to advance in line with our financial and strategic priorities to close out the fiscal year,” Walgreens CEO Tim Wentworth said on Friday’s earnings call. “We have started,” he said.

“Importantly, we have begun to move forward on opportunities that we believe are essential to our long-term turnaround,” he said, adding that the “cornerstone” of that effort is stabilizing the U.S. retail pharmacy business. .

Walgreens is coming off an eventful last year marked by pharmacy reimbursement pressures, weak in-store consumer spending and challenges related to its expansion into primary care, among other things. The results were announced amid reports that the company was in talks to sell itself to private equity firm Sycamore Partners.

During its fiscal first quarter, Walgreens posted revenue of $39.46 billion, an increase of 7.5% year-over-year, driven by growth in its three business units.

The company reported a net loss of $265 million, or 31 cents per share, for its fiscal first quarter. Net loss for the year-ago period was $67 million, or 8 cents per share.

Walgreens said the loss was primarily due to higher operating losses, reflecting a multi-year plan to close unprofitable stores. This includes 1,200 over the next three years, and 500 in 2025 alone.

According to Walgreens’ website, Walgreens has approximately 8,500 retail stores across the United States. Wentworth said the company expects “the pace of store closures to accelerate significantly from first quarter levels.”

Adjusted earnings, excluding certain items, were 51 cents per share.

In addition to store closures, Wentworth said Walgreens is “improving the way we forecast, allocate and schedule workforce” in its stores. The company will implement a new scheduling model at approximately 200 locations in January to improve the in-store experience for customers, patients and employees.

The change will set employee schedules based on store-specific demand patterns, he said, while also taking team member availability and preferences into account.

However, Wentworth said that rebuilding the consumer retail business is “made more difficult by the continued deterioration in consumer discretionary spending.” Wenworth said shoppers continue to exhibit value-seeking behavior in the face of pressure from inflation and rising interest rates.

“We are moving forward with many elements of our retail strategy,” he said. “Early green shoots are starting to appear, but there is still significant work to be done here.”

Walgreens posted growth across its three business segments in the first quarter.

Sales in the company’s U.S. retail pharmacy segment were $30.87 billion, an increase of 6.6% from the same period last year. Analysts had expected sales of $29.21 billion, according to estimates compiled by Street Account.

The segment operates the company’s drug stores, which sell prescription and non-prescription drugs, as well as health and wellness, beauty, personal care and food products.

Walgreens announced that pharmacy sales for the quarter rose 10.4% year-over-year, and comparable pharmacy sales rose 12.7%, due in part to higher prices for branded drugs.

The total number of prescriptions containing vaccines filled in the quarter was 316.3 million, an increase of 1.5% year over year. Retail sales were down 6.2% year-over-year, and comparable retail sales were down 4.6%. The company cited a weakening cough, cold and flu season and lower sales in the discretionary products category.

Sales at the company’s U.S. healthcare division soared to $2.17 billion in the first quarter, an increase of more than 12% from a year earlier. Analysts had expected sales of $2.09 billion, according to estimates compiled by Street Account.

This partially reflects growth at primary care provider VillageMD and specialty pharmacy company Shields Health Solutions. Specialty pharmacies are often designed to provide medications for patients with complex conditions, with unique handling, storage, and distribution requirements.

Walgreens’ international division, which operates more than 3,000 retail stores overseas, posted sales of $6.43 billion in the fiscal first quarter. This is an increase of 10.2% compared to the same period last year.

Analysts had expected sales of $5.85 billion for the current fiscal year, according to Street Accounts.

Sales at UK-based drugstore chain Boots rose 4.5%, the company said.