Walgreens Boots Alliance (WBA) beat Wall Street estimates on Friday for its adjusted earnings per share and sales for the first quarter of fiscal 2025, although questions remain about its future as a public company.
The company reported revenue of $39.5 billion for the quarter, up 7% from the same quarter last year and above the Bloomberg consensus estimate of $37.3 billion. Walgreens also reported adjusted earnings per share of $0.51, compared to consensus estimates of $0.38 per share.
The company recorded lower-than-expected sales of vaccines and drugs against the flu season because the winter respiratory virus season was not as bad as in previous years.
Shares rose Friday, 27% to $11.70 a share, on news that the company is moving forward with spinning off its VillageMD health services business. Walgreens has been pursuing a change in strategy since CEO Tim Wentworth took over in late 2023.
Ends: January 10th at 4:00:01 PM EST
VillageMD performed poorly, resulting in an operating loss on Walgreens’ books. She was slightly better this quarter, along with the company’s pharmaceutical benefits manager, Shields. Together, they reported a loss of $325 million, compared with a loss of $436 million in the prior period.
The company is still evaluating what to do with New Jersey-based urgent care centers Summit Health and CityMD, which were also part of the 2021 acquisition of a controlling stake in VillageMD.
The company has faced a number of pressures, prompting a series of store closures amid a tough retail environment. Storefront sales have tended to be a drag on all retail pharmacies in recent years as customers turn to online and other avenues.
Wentworth highlighted some improvements to the store experience, including a digital waiting list to pick up prescriptions to help customers avoid taking up pharmacists’ time trying to get prescriptions.
Wentworth said this would allow customers to shop while they wait. If they do, customers will face product bundling; for example, some might focus on women’s health. It’s a way of meeting customers’ needs where they are, he said.
Walgreens is still in the process of closing about 450 underperforming stores, 67 of which were closed in the first quarter.
“This turnaround — we said it would take time … and we’re committed to our vision of a retail pharmacy-led organization,” Wentworth said on Friday’s earnings call, noting there was a “level of urgency, discipline and focus” across the organization.
