In this article, Walgreens reported fiscal first-quarter earnings and revenue that exceeded expectations by shutting stores and reducing costs to navigate a challenging period. For the three-month period ending Nov. 30, Walgreens maintained its fiscal 2025 adjusted earnings guidance at $1.40 to $1.80 per share, without providing annual sales guidance. The company’s shares surged by 27% following the announcement.
CEO Tim Wentworth stated that despite consumer challenges, progress was made on financial and strategic priorities, focusing on stabilizing the U.S. retail pharmacy business. The past year was tumultuous for Walgreens due to various issues, including pharmacy reimbursement pressure and softer consumer spending. Reports suggest the company is in talks for a potential sale to private equity firm Sycamore Partners.
During the fiscal first quarter, Walgreens recorded sales of $39.46 billion, a 7.5% increase from the previous year, with a net loss of $265 million, or 31 cents per share. The loss was attributed to higher operating losses from the plan to close underperforming stores. Walgreens plans to accelerate store closures, aiming to close 1,200 stores over the next three years.
Adjusted earnings for the quarter were 51 cents per share, excluding certain items. Walgreens is also implementing changes in labor forecasting and scheduling to enhance the in-store experience. Despite challenges in consumer discretionary spending, the company is progressing with its retail strategy.
In the fiscal first quarter, all three business segments of Walgreens experienced growth. The U.S. retail pharmacy division saw sales of $30.87 billion, a 6.6% increase, driven by pharmacy sales growth. Total prescriptions filled increased by 1.5%, while retail sales declined due to a weaker cough, cold, and flu season.
Sales from the U.S. health-care unit rose to $2.17 billion, reflecting growth in primary-care provider VillageMD and specialty pharmacy company Shields Health Solutions. The international unit, operating over 3,000 retail stores abroad, reported $6.43 billion in sales, with the U.K.-based drugstore chain Boots showing a 4.5% sales increase.
