Walgreens (WBA) earnings Q1 2025

Walgreens on Friday reported fiscal first-quarter earnings and revenue that topped expectations, because it shutters stores and cuts other costs to steer itself out of a rough spot.

Here’s what Walgreens reported for the three-month period ended Nov. 30 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: 51 cents adjusted vs. 37 cents expected
• Revenue: $39.46 billion vs. $37.36 billion expected

Even after the large beats, Walgreens maintained its fiscal 2025 adjusted earnings guidance of $1.40 to $1.80 per share. The corporate didn’t include annual sales guidance in its release. In October, Walgreens said it expects revenue for the fiscal 12 months of $147 billion to $151 billion. 

The corporate’s shares spiked greater than 20% in morning trading.

“We have began the fiscal 12 months by making progress against our financial and strategic priorities, despite the difficult backdrop for our consumer,” Walgreens CEO Tim Wentworth said during an earnings call Friday. 

“Importantly, we began to progress on the opportunities that we consider essential to our long term turnaround,” he said, adding that the “cornerstone” of that effort is stabilizing its U.S. retail pharmacy business.

Walgreens capped off a rocky past 12 months marked by pharmacy reimbursement pressure, softer consumer spending at its stores and challenges related to its push into primary care, amongst other issues. The outcomes come amid reports that the corporate is in talks to sell itself to personal equity firm Sycamore Partners. 

Through the fiscal first quarter, Walgreens booked sales of $39.46 billion, up 7.5% from the identical period a 12 months ago, as its three business segments grew. 

The corporate reported a net lack of $265 million, or 31 cents per share, for the fiscal first quarter. It compares with a net lack of $67 million, or 8 cents per share, for the year-earlier period.

Walgreens said the loss was primarily driven by higher operating losses, which reflect its multiyear plan to shut underperforming stores. That features 1,200 over the following three years, with 500 in fiscal 2025 alone. 

Walgreens has around 8,500 retail pharmacy locations across the U.S., in accordance with its website. The corporate expects to “significantly ramp the pace of our store closures from the primary quarter level,” Wentworth said.

Excluding certain items, adjusted earnings were 51 cents per share for the quarter. 

Other than the shop closures, Wentworth said Walgreens is “refining the way in which we forecast, allocate and schedule labor” in its stores. The corporate is launching a latest scheduling model in about 200 locations in January to enhance the in-store experience for purchasers, patients and employees.

The changes will schedule employees based on store-specific demand patterns, while also accounting for team member availability and preferences, he said.

Wentworth noted, nevertheless, that turning around the patron retail business has been “made more difficult by the persistent deterioration in consumer discretionary spending.” Shoppers face pressure from inflation and better rates of interest, and proceed to indicate value-seeking behavior, Wenworth said.

“We’re progressing a lot of elements of our retail strategy,” he said. “While we’re seeing early green shoots, we still have substantial work to do here.”