Walgreens Boots Alliance (WBA) on Friday beat Wall Street estimates for its adjusted earnings per share and sales for the first quarter of fiscal 2025, even as questions remain about its future as a public company.
The company reported $39.5 billion in revenue for the quarter, up 7% from the same quarter last quarter and above Bloomberg consensus estimates 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 reported lower-than-expected sales of vaccines and over-the-counter medications for the flu season, as the winter respiratory virus season has not been as bad as in previous years.
Shares 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 sought a change in strategy since CEO Tim Wentworth took over at the end of 2023.
Closing: January 10 at 4:00:01 pm EST
VillageMD has been performing poorly, resulting in an operating loss for Walgreens’ books. This quarter he performed slightly better, along with the company’s pharmacy benefits 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-based urgent care centers Summit Health and CityMD, which were also part of its 2021 acquisition of VillageMD’s controlling stake.
The company has faced a number of pressures that led to a series of store closures amid a difficult retail environment. In-store sales have generally been a drag for all retail pharmacies in recent years as customers turn to shopping online and through other avenues.
Wentworth highlighted some improvements to the store experience, including a digital waiting list for prescription pickup to help customers avoid wasting pharmacists’ time while trying to fill their prescriptions.
Wentworth said this would allow customers 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 in the first quarter.
“This change… we have said it will take time… and we are committed to our vision of a retail pharmacy-led organization,” Wentworth said during an earnings conference call Friday, noting that there is a “level of urgency, discipline and focus” throughout the organization.