In this article, Walgreens reported fiscal first-quarter earnings and revenue that exceeded expectations by shutting down stores and reducing costs to navigate through a challenging period. For the three-month period ending on 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 had previously estimated revenue for the fiscal year to be between $147 billion and $151 billion.
Despite the positive results, Walgreens’ shares surged by 27% on Friday. CEO Tim Wentworth mentioned progress in financial and strategic priorities during an earnings call, emphasizing the importance of stabilizing the U.S. retail pharmacy business for long-term recovery. The past year was tumultuous for Walgreens due to various challenges, including pharmacy reimbursement pressure and softer consumer spending.
During the fiscal first quarter, Walgreens reported sales of $39.46 billion, a 7.5% increase from the same period last year. The company incurred a net loss of $265 million, or 31 cents per share, primarily due to higher operating losses related to the closure of underperforming stores. Walgreens plans to close 1,200 stores over the next three years, with 500 closures expected in fiscal 2025.
Adjusted earnings for the quarter were 51 cents per share, excluding certain items. Apart from store closures, Walgreens is implementing changes in labor forecasting, allocation, and scheduling to enhance the in-store experience. The company aims to schedule workers based on store-specific demand patterns and team member availability.
Despite challenges in consumer discretionary spending, Walgreens is progressing with its retail strategy. The U.S. retail pharmacy division saw sales of $30.87 billion, a 6.6% increase from the previous year, driven by growth in pharmacy sales. Total prescriptions filled in the quarter, including vaccines, increased by 1.5% year-over-year.
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. Walgreens’ international unit, with over 3,000 retail stores abroad, reported $6.43 billion in sales, a 10.2% increase from the previous year. Sales from the U.K.-based drugstore chain, Boots, increased by 4.5%.
