People walk past a Walgreens on November 3, 2024 in Brookline, Massachusetts.
Danielle DeVries | CNBC
Walgreens on Friday reported fiscal first-quarter earnings and revenue that beat expectations, as it closes stores and cuts other costs to pull itself out of a tough situation.
Here’s what Walgreens reported for the three-month period ended Nov. 30 compared with what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: 51 cents adjusted versus the expected 37 cents
- Income: $39.46 billion vs. $37.36 billion expected
Even after the big hits, 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. Walgreens said in October that it expected revenue for the fiscal year of $147 billion to $151 billion.
The company has finished the difficult last year marked by pharmacy reimbursement pressuresofter consumer spending and the challenges associated with it push into primary health careamong other issues. The results are coming in the middle of the report that the company is in negotiations to sell it to the private company Sycamore Partners.
During its fiscal first quarter, Walgreens posted sales of $39.46 billion, up 7.5% year-over-year, as its three business segments grew.
The company reported a net loss of $265 million, or 31 cents per share, in the first fiscal quarter. That compares with a net loss of $67 million, or 8 cents per share, for the year-ago period.
Walgreens said the loss was driven primarily 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 year 2025 alone.
Walgreens has about 8,500 retail pharmacies across the U.S., according to its data 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: stabilizing retail pharmacies by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address the reimbursement model,” Walgreens CEO Tim Wentworth said in a statement.
He added that “while our turnaround will take time, our early progress reinforces our belief in a viable retail pharmacy-led operating model.”
Growth among business units
Walgreens posted growth in its three business segments in its fiscal first quarter.
The company’s US retail pharmacy division generated $30.87 billion in sales, an increase of 6.6% over the same period last year. Analysts had expected sales of $29.21 billion, according to estimates compiled by StreetAccount.
That unit manages the company’s drugstores, which sell prescription and over-the-counter drugs, as well as health and wellness, beauty, personal care and nutritional products.
Walgreens said pharmacy sales rose 10.4% in the quarter, and comparable pharmacy sales rose 12.7% compared to the year-ago period due to brand name drug price inflation, among other factors.
The total number of prescriptions issued in the quarter, including vaccines, was 316.3 million, an increase of 1.5% compared to the same period last year. Retail sales fell 6.2% compared to the prior-year quarter, and comparable retail sales fell 4.6%. The company cited a weaker cough, cold and flu season and lower sales in discretionary product categories as the reason.
Sales at the company’s U.S. healthcare unit jumped to $2.17 billion in the fiscal first quarter, up more than 12% year-over-year. Analysts had expected sales of $2.09 billion, according to estimates compiled by StreetAccount.
This partly reflects the growth of primary care provider VillageMD and specialty pharmacy company Shields Health Solutions. Specialty pharmacies are designed to deliver drugs with unique handling, storage and distribution requirements, often for patients with complex conditions.
Walgreens’ international unit, which operates more than 3,000 retail stores overseas, posted sales of $6.43 billion in the first fiscal quarter. This is an increase of 10.2 percent compared to the same period last year.
Analysts had expected revenue of $5.85 billion for the period, according to StreetAccount.
The company announced that sales of its British drugstore chain Boots rose by 4.5 percent.
