People walk past a Walgreens pharmacy on November 3, 2024 in Brookline, Massachusetts.
Danielle DeVries | CNBC
Walgreens on Friday reported fiscal first-quarter profit and revenue that beat estimates as the company closed stores and cut other costs to get out of trouble.
Here’s how Walgreens’ report for the three months ended Nov. 30 compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted 51 cents, expected 37 cents
- income: US$39.46 billion, expected US$37.36 billion
Even after the sharp decline in results, Walgreens maintained its fiscal 2025 adjusted profit guidance of $1.40 to $1.80 per share. The company did not include annual sales guidance in its press release. In October, Walgreens said it expected revenue for the current fiscal year to be $147 billion to $151 billion.
Shares rose more than 5% in premarket trading.
The company has had a difficult past year, which was characterized by pharmacy reimbursement pressure, soft consumer spending and challenges related to its push into primary care. The result is here in reports The company is in talks to sell to private equity firm Sycamore Partners.
In the first fiscal quarter, with the growth of its three major business units, Walgreens’ sales reached US$39.46 billion, an annual increase of 7.5%.
The company reported a fiscal first-quarter net loss of $265 million, or 31 cents per share. This compares with a net loss of $67 million, or 8 cents per share, in the same period last year.
Walgreens said the loss was primarily due to an increase in operating losses, reflecting its multi-year plan to close underperforming stores. That includes 1,200 over the next three years, and 500 in fiscal 2025 alone.
According to Walgreens, the company has about 8,500 retail pharmacies in the United States. website.
Excluding certain items, adjusted earnings per share for the quarter were 51 cents.
Walgreens CEO Tim Wentworth said in a press release that first-quarter results “reflect our disciplined execution of our 2025 priorities: by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address our reimbursement model.” Stable retail dispensary.
He added, “While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model.”
Growth of each business unit
Walgreens posted growth in all three business segments in the fiscal first quarter.
The company’s U.S. retail pharmacy division had sales of US$30.87 billion, a 6.6% increase from the same period last year. Analysts had expected sales of $29.21 billion, according to StreetAccount estimates.
This segment operates the company’s pharmacies, which sell prescription and over-the-counter medicines as well as health, beauty, personal care and food products.
Walgreens said that due to factors such as rising prices of brand-name drugs, pharmacy sales increased by 10.4% year-on-year this quarter, and sales at similar pharmacies increased by 12.7% year-on-year.
The total number of prescription drugs (including vaccines) written this quarter reached 316.3 million, an increase of 1.5% from the same period last year. Retail sales fell 6.2% from the same period last year and 4.6% from retail sales. The company noted a weaker cough, cold and flu season and lower sales in the discretionary product category.
Sales at the company’s U.S. healthcare unit jumped to $2.17 billion in the first quarter, up more than 12% from the same period last year. Analysts had expected sales of $2.09 billion, according to StreetAccount estimates.
This partly reflects the growth of primary care provider VillageMD and specialty pharmaceutical company Shields Health Solutions. Specialty pharmacies are designed to provide medications with unique handling, storage and dispensing requirements, often for patients with complex medical conditions.
Walgreens’ international division operates more than 3,000 retail stores overseas and generated fiscal first-quarter sales of $6.43 billion. An increase of 10.2% compared with the same period last year.
Analysts expected revenue of $5.85 billion in the period, according to StreetAccount.
The company said sales at its UK pharmacy chain Boots rose 4.5%.
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