Walgreen Boots Alliance (WBA) on Friday beat Wall Street estimates on earnings and sales per share for the first quarter of fiscal 2025, even as questions remain about its future as a public company.
The company reported revenue of $39.5 billion for the quarter, up 7% from the same quarter last year and above the Bloomberg consensus estimate of $37.3 billion. Walgreens also reported adjusted earnings per share of $0.51, compared to the consensus estimate of $0.38 per share.
The company saw lower-than-expected sales of vaccines and over-the-counter flu season medicine, as the winter respiratory virus season hasn’t been as bad as previous years.
The stock traded higher on Friday, up 27% to $11.70 per share, on news that the company is moving forward with spinning off the VillageMD healthcare services business. Walgreens has undergone a shift in strategy since CEO Tim Wentworth took over in late 2023.
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VillageMD is performing poorly, resulting in an operating loss for Walgreens books. The quarter fared slightly better, along with Shields, the company’s pharmacy benefit manager. Together, they reported a loss of $325 million, compared with a loss of $436 million in the prior period.
The company is still evaluating what to do with New Jersey-based Summit Health and CityMD Urgent Care Centers, which were also part of the controlling stake acquisition of VillageMD in 2021.
The company has faced a number of pressures, prompting a round of store closures amid a tough retail environment. Front-of-store sales in general have been a drag on all retail pharmacies in recent years as customers are primed to shop online and shop in other ways.
Wentworth highlighted some of the improvements to the store experience, including a digital waiting list to pick up prescriptions to help customers avoid taking up pharmacists’ time while they’re trying to fill prescriptions.
Wentworth said it will give customers a chance to shop while they wait. If they do, customers will be exposed to product groups; For example, some may focus on women’s health. It’s a way to meet customers’ needs where they are, he said.
Walgreens is still in the process of closing about 450 underperforming stores, 67 of which were closed in the first quarter.
“This change — we’ve said it’s going to take time … and we’re committed to our vision of a retail pharmacy-led organization,” Wentworth said during an earnings call Friday, noting that there is a “Needs level, discipline, and focus” throughout the organization.
