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People line up near a Walgreens pharmacy on March 9, 2023 in New York City.
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Walgreens On Friday it reported fiscal first-quarter earnings and revenue that beat expectations, as it shutters stores and cuts other costs to steer itself out of a tough spot.
Here’s what Walgreens said for the three-month period ended Nov. 30 compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: 51 cents adjusted vs. 37 cents expected
- Revenue: $39.46 billion versus $37.36 billion expected
Even after the big beats, Walgreens maintained its fiscal 2025 adjusted earnings guidance of $1.40 to $1.80 per share. The company did not include annual sales guidance in its release. In October, Walgreens said it expected revenue for the fiscal year of $147 billion to $151 billion.
The company’s shares jumped about 10% in premarket trading.
Walgreens has had a rocky past year marked by pharmacy reimbursement pressuresweeter consumer spending and challenges related to it push into primary careamong other problems. The results are coming among the reports that the company is in talks to sell itself to private equity firm Sycamore Partners.
During the first fiscal quarter, Walgreens reported sales of $39.46 billion, up 7.5% from the same period last year, as its three business segments grew.
The company reported a net loss of $265 million, or 31 cents per share, for the first fiscal quarter. That compares with a net loss of $67 million, or 8 cents per share, for the year-earlier period.
Walgreens said the loss was primarily driven by higher operating losses, reflecting its multi-year plan to close underperforming stores. That includes 1,200 over the next three years, with 500 in fiscal 2025 alone.
Walgreens has about 8,500 retail pharmacy locations in the United States, according to its website.
Excluding certain items, adjusted earnings were 51 cents per share for the quarter.
The first quarter results “reflect our disciplined execution against our 2025 priorities: stabilize retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to target reimbursement models,” the Walgreens CEO Tim Wentworth said in a statement.
He added that “while our turnaround will take time, our initial progress reinforces our belief in a sustainable, retail pharmacy-led operating model.”
Growth among business units
Walgreens posted growth in all three of its business segments in the fiscal first quarter.
The company’s US retail pharmacy division generated $30.87 billion in sales, an increase of 6.6% from the same period last year. Analysts had expected sales of $29.21 billion, according to estimates compiled by StreetAccount.
This unit operates the company’s pharmacies, which sell prescription and non-prescription medications, as well as health and wellness, beauty, personal care and food products.
Walgreens said pharmacy sales for the quarter increased 10.4% and comparable pharmacy sales increased 12.7% compared to the year-ago period due to price inflation of brand name medications, among other factors.
Total prescriptions filled in the quarter, including vaccines, came to 316.3 million, an increase of 1.5% from the same period a year ago. Retail sales fell 6.2% from the prior-year quarter, and comparable retail sales declined 4.6%. The company cited a weaker cough, cold and flu season and lower sales in discretionary product categories.
Sales from the company’s US health unit jumped to $2.17 billion in the first fiscal quarter, up 12% from the same period a year ago. Analysts had expected sales of $2.09 billion, according to estimates compiled by StreetAccount.
That partly reflects growth in primary care provider VillageMD and specialty pharmacy company Shields Health Solutions. Specialty pharmacies are designed to provide medications with unique handling, storage and distribution requirements, often for patients with complex conditions.
The international unit of Walgreens, which operates more than 3,000 retail stores abroad, booked $6.43 billion in sales in the first fiscal quarter. It is an increase of 10.2% from the period of the year.
Analysts had expected revenue of $5.85 billion for the period, according to StreetAccount.
The company said sales from its UK-based pharmacy chain, Boots, rose 4.5%.
