Walgreens reported a better-than-expected fiscal first quarter performance, despite incurring a loss of $265 million as it continued its efforts to revitalize its business. The company attributed the loss to higher costs associated with its plan to close around 1,200 U.S. stores, a strategy announced in October. Although the exact number of closed stores was not disclosed, Walgreens has already shuttered approximately a thousand U.S. locations since acquiring some Rite Aid stores in 2018.
Walgreens Boots Alliance Inc. operates nearly 3,700 international stores across various countries, including the United Kingdom, Mexico, Thailand, and Ireland. CEO Tim Wentworth emphasized the company's focus on cost control, cash flow improvement, and prescription reimbursement enhancements as part of its turnaround strategy, with a target set for 2025.
In the fiscal first quarter, Walgreens recorded adjusted earnings per share of 51 cents, excluding store closing costs, with revenue reaching $39.5 billion, a 7.5% increase. Analysts had anticipated earnings of 38 cents per share on $37.4 billion in sales, according to FactSet.
The company's core U.S. retail pharmacy business experienced over 8% growth in sales, driven by increased prescription volumes. However, sales in the non-pharmacy retail segment declined, partly due to a milder cough, cold, and flu season. Walgreens also noted growth in its scaled-back U.S. healthcare business.
Reaffirming its fiscal 2025 forecast, Walgreens expects adjusted earnings per share to range between $1.40 and $1.80, compared to analysts' forecast of $1.52 per share. Following a challenging period in 2024, which saw the company reduce its quarterly dividend and exit the Dow Jones Industrial Average, Walgreens shares surged more than 16% to $10.71 in premarket trading on Friday, signaling a positive start to the year.
