Walgreens Boots Alliance has reported fiscal first-quarter earnings and revenue that exceeded Wall Street's expectations, reflecting the company's effective cost-cutting strategy. The drugstore chain announced adjusted earnings per share of 51 cents, surpassing the anticipated 37 cents. Revenue for the quarter reached $39.46 billion, outstripping the expected $37.36 billion. Despite the promising results, Walgreens maintained its fiscal 2025 adjusted earnings guidance of $1.40 to $1.80 per share, projecting revenue for the fiscal year to range between $147 billion and $151 billion. Following this announcement, Walgreens shares surged approximately 10% in premarket trading.
The company's performance metrics showed growth across various sectors. Total prescriptions filled during the quarter totaled 316.3 million, marking a 1.5% increase from the same period last year, including vaccines. The U.S. health-care unit reported sales of $2.17 billion, reflecting an impressive growth of over 12% compared to the previous year. Additionally, pharmacy sales rose by 10.4%, with comparable pharmacy sales increasing by 12.7%.
Walgreens' international operations also contributed to the positive results. The company's U.K.-based drugstore chain, Boots, experienced a 4.5% increase in sales. The international unit as a whole booked $6.43 billion in sales during the fiscal first quarter, representing a 10.2% increase from the corresponding period last year.
Domestically, Walgreens' U.S. retail pharmacy division generated $30.87 billion in sales, a 6.6% rise from the prior year’s corresponding period. Nevertheless, retail sales encountered a decline of 6.2% when compared to the previous year’s quarter, with comparable retail sales decreasing by 4.6%. Walgreens operates approximately 8,500 retail pharmacy locations across the United States.
The company's CEO, Tim Wentworth, attributed these results to Walgreens' strategic initiatives aimed at stabilizing its retail pharmacy operations and optimizing overall business efficiency.
"Reflect our disciplined execution against our 2025 priorities: stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models," – Walgreens CEO Tim Wentworth.
In addition to its financial performance, Walgreens is reportedly in discussions to potentially sell itself to the private equity firm Sycamore Partners. Although details remain sparse, such a move could have significant implications for the company's future direction.
The company’s management acknowledges that while recent progress is encouraging, the turnaround will require sustained effort over time.
"While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model." – Walgreens CEO Tim Wentworth.