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People walk past a Walgreens on November 3, 2024 in Brookline, Massachusetts.
Danielle DeVries | CNBC
Walgreens On Friday it reported fiscal first-quarter earnings and revenue that beat expectations, as it closes stores and cuts other costs to get out of a difficult situation.
Here’s what Walgreens reported for the three-month period ended Nov. 30 compared to what Wall Street expected, according to a survey of analysts by LSEG:
Even after the big hits, Walgreens maintained its fiscal 2025 adjusted earnings guidance of between $1.40 and $1.80 per share. The company did not include annual sales guidance in its statement. In October, Walgreens said it expects fiscal year revenue of between $147 billion and $151 billion.
Shares rose more than 5% in premarket trading.
The company capped a difficult last year marked by pharmacy reimbursement pressureweaker consumer spending and challenges related to its push to primary careamong other issues. The results come amidst reports that the company is in talks to sell itself to private equity firm Sycamore Partners.
During the fiscal first quarter, Walgreens posted sales of $39.46 billion, up 7.5% from the same period a year earlier, as its three business segments grew.
The company reported a net loss of $265 million, or 31 cents per share, for the fiscal first quarter. That compares with a net loss of $67 million, or 8 cents per share, in the same period a year earlier.
Walgreens said the loss was primarily due to 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 2025 alone.
Walgreens has about 8,500 retail pharmacies across the United States, according to its 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 pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models,” Walgreens CEO said , Tim Wentworth, in a statement.
He added that “while our recovery will take time, our early progress reinforces our belief in a sustainable operating model led by retail pharmacies.”
Walgreens posted growth in all three of its business segments in the fiscal first quarter.
The company’s U.S. retail pharmacy division generated $30.87 billion in sales, an increase of 6.6% from the same period last year. Analysts were expecting sales of $29.21 billion, according to StreetAccount estimates.
That unit operates the company’s pharmacies, which sell prescription and over-the-counter medications, as well as health and wellness, beauty, personal care and food products.
Walgreens said pharmacy sales for the quarter increased 10.4% and comparable pharmacy sales increased 12.7% compared to the same period a year ago due to price inflation for brand-name drugs, among other factors.
Total prescriptions filled in the quarter, including vaccines, amounted to 316.3 million, an increase of 1.5% from the same period last year. Retail sales fell 6.2% from the prior-year quarter and comparable retail sales decreased 4.6%. The company cited a weaker cough, cold and flu season and lower sales in discretionary product categories.
Sales at the company’s U.S. healthcare unit rose to $2.17 billion in the fiscal first quarter, up more than 12% from the same period a year earlier. Analysts had expected sales of $2.09 billion, according to estimates compiled by StreetAccount.
That partly reflects the growth of primary care provider VillageMD and specialty pharmacy company Shields Health Solutions. Specialty pharmacies are designed to deliver medications 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 fiscal first quarter. That’s an increase of 10.2% from the same period last year.
Analysts were expecting revenue of $5.85 billion for the period, according to StreetAccount.
The company said sales at its UK-based pharmacy chain, Boots, rose 4.5%.