Walgreens (WBA) Q1 2025 earnings

Walgreens On Friday, it reported fiscal first-quarter earnings and revenue that beat expectations, as it closed stores and cut other costs to steer itself out of a difficult situation.

Here’s what Walgreens reported for the three-month period ending Nov. 30 compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:

• EPS: 51 cents were revised versus 37 cents expected
• profit: $39.46 billion compared to $37.36 billion expected

Even after the big beat, 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 release. In October, Walgreens said it expects fiscal year revenue of between $147 billion to $151 billion.

The company’s shares rose 27% on Friday.

“We began the fiscal year making progress against our financial and strategic priorities, despite our challenging consumer backdrop,” Walgreens CEO Tim Wentworth said during an earnings call on Friday.

“Most importantly, we have begun to move forward on opportunities that we consider essential to our long-term transformation,” he said, adding that the “cornerstone” of this effort is stabilizing the retail pharmacy business in the United States.

Walgreens capped off a rocky past year marked by Pharmacy reimbursement pressureWeak consumer spending in its stores and related challenges Payment to primary careamong other issues. Results come amid reports The company is in talks to sell itself to private equity firm Sycamore Partners.

During its fiscal first quarter, Walgreens generated sales of $39.46 billion, up 7.5% from the same period last year, with all three of its business segments growing.

The company reported a net loss of $265 million, or 31 cents per share, in its fiscal first quarter. This compares to a net loss of $67 million, or 8 cents per share, in the same period a year earlier.

Walgreens said the loss was primarily driven by higher operating losses, which reflects its multi-year plan to close underperforming stores. This includes 1,200 over the next three years, including 500 in fiscal year 2025 alone.

Walgreens has about 8,500 retail pharmacy locations across the United States, according to it Website. Wentworth said the company expects to “significantly increase the pace of our store closures from the first quarter level.”

Excluding certain items, adjusted earnings were 51 cents per share during the quarter.

Aside from store closures, Wentworth said Walgreens is “working to improve the way we anticipate, allocate and schedule labor” in its stores. The company is launching a new scheduling model at about 200 locations in January to improve the store experience for customers, patients and employees.

The changes will schedule workers based on the store’s demand patterns, while also taking into account team members’ availability and preferences, he said.

However, Wentworth noted that the turnaround in consumer retail “has become more difficult due to the continuing deterioration in consumer discretionary spending.” Shoppers are facing pressure from inflation and rising interest rates, and continue to exhibit value-seeking behavior, Wenworth said.

“We are making progress on a number of elements of our retail strategy,” he said. “While we are seeing early green shoots, we still have a lot of work to do here.”