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Walgreens Boots Alliance (WITH) beat Wall Street estimates on its adjusted earnings per share and sales for the first quarter of fiscal 2025 on Friday, although questions remain about its future as a public company.
The company reported revenue of $39.5 billion in 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 consensus estimates of $0.38 per share.
The company saw sales of vaccines and over-the-counter drugs for the flu season below expectations, as the winter respiratory virus season has not been as bad as in previous years.
The stock jumped 27% to $11.70 a share on Friday after news that the company is moving forward with its spin-off of the VillageMD health services business. Walgreens has been pursuing a change in strategy since CEO Tim Wentworth took over at the end of 2023.
Closing: January 10th at 4:00:01 PM EST
VillageMD has performed poorly, resulting in an operating loss on Walgreens’ books. It performed slightly better this quarter, along with the company’s pharmacy benefit manager Shields. 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’s Summit Health and CityMD urgent care centers, which were also part of the acquisition of a controlling stake in VillageMD in 2021.
The company has faced a number of pressures, leading to a round of store closures amid a tough retail environment. In recent years, in-store sales have been a drag on all retail pharmacies as customers shift to online and other avenues.
Wentworth highlighted some improvements to the store experience, including a digital waiting list for prescription pickup to help customers avoid taking up pharmacists’ time while trying to fill prescriptions.
Wentworth said this would allow customers the opportunity to shop while they wait. If they do, customers will face product bundling; for example, some might 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 as of the first quarter.
“This change, we’ve said will take time … and we’re committed to our vision of a retail pharmacy-led organization,” Wentworth said during an earnings call Friday, noting there’s a “level of urgency, discipline and focus” throughout the organization.
