Brookline, Massachusetts – Walgreens, a leading pharmacy retailer, announced impressive financial results for the first quarter, exceeding Wall Street’s expectations. The company’s earnings per share were reported at 51 cents adjusted, surpassing the anticipated 37 cents. Additionally, revenue reached $39.46 billion, higher than the expected $37.36 billion. Despite these positive outcomes, Walgreens maintained its fiscal 2025 adjusted earnings guidance of $1.40 to $1.80 per share.
Throughout the past year, Walgreens faced various challenges, including pharmacy reimbursement pressure, decreased consumer spending, and difficulties related to its expansion into primary care services. Amid reports of potential acquisition talks with private equity firm Sycamore Partners, the company managed to achieve a 7.5% increase in sales during the fiscal first quarter, totaling $39.46 billion. However, a net loss of $265 million, or 31 cents per share, was reported for the same period, attributed to higher operating losses from store closures as part of a strategic restructuring plan.
Walgreens plans to close 1,200 underperforming stores over the next three years, with 500 closures expected in fiscal 2025 alone. This initiative aims to optimize the company’s retail footprint and control operating costs. Despite the challenges faced, Walgreens CEO Tim Wentworth remains optimistic about the future, emphasizing the importance of their 2025 priorities to stabilize the retail pharmacy sector and enhance overall performance. The CEO expressed confidence in a sustainable turnaround, stating that early progress reinforces their commitment to a successful retail pharmacy-led operating model.
In the first quarter, Walgreens saw growth across its three business segments – U.S. retail pharmacy, U.S. health-care, and international units. The U.S. retail pharmacy division generated sales of $30.87 billion, driven by a 10.4% increase in pharmacy sales and a notable rise in prescriptions filled. The U.S. health-care unit reported a substantial revenue jump, reflecting growth in primary-care provider VillageMD and specialty pharmacy company Shields Health Solutions.
Internationally, Walgreens’ presence in over 3,000 retail stores abroad contributed to a 10.2% increase in sales, with its U.K.-based drugstore chain, Boots, experiencing a 4.5% revenue growth. These positive outcomes demonstrate the company’s efforts to navigate challenges and drive growth across its various business segments, positioning Walgreens for continued success in the evolving retail pharmacy landscape.
