Walgreens Boots Alliance (WBA) beat Wall Street estimates for its adjusted earnings per share and sales for the first quarter of fiscal 2025 on Friday, even as questions persist about its future as a public company.
The company reported revenue of $39.5 billion for the quarter, up 7% from the same quarter last quarter and above Bloomberg’s consensus estimate of $37.3 billion. Walgreens also reported adjusted earnings per share of $0.51, compared to the consensus estimate of $0.38 per share.
The company saw lower-than-expected sales of its vaccines and over-the-counter flu season medications, as the winter respiratory virus season was not as bad as in previous years.
The stock traded higher on Friday, up 27% to $11.70 per share, amid news that the company is moving forward with the spinoff of its VillageMD healthcare services business. Walgreens has pursued a strategy shift since CEO Tim Wentworth took office in late 2023.
VillageMD performed poorly, resulting in an operating loss for Walgreens’ books. It performed slightly better in the quarter, along with the company’s pharmacy benefits manager, Shields. Together they reported a loss of $325 million, compared to a loss of $436 million in the prior period.
The company is still evaluating what to do with Summit Health and New Jersey-based 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 difficult retail environment. Front-of-store sales have traditionally been a drag on all retail pharmacies in recent years as customers have turned to shopping online and through other methods.
Wentworth highlighted some improvements to the store experience, including a digital queue to pick up prescriptions to help customers avoid taking up pharmacists’ time as they try to fill prescriptions.
This will give customers the opportunity to shop while they wait, Wentworth said. If they did, customers would encounter combinations of products; For example, some may focus on women’s health. He said it is a way to meet customers’ needs wherever they are.
Walgreens is still in the process of closing about 450 underperforming stores, 67 of which were closed as of the first quarter.
“We’ve said this transformation will take time, and we are committed to our vision of a retail pharmacy-led organization,” Wentworth said during an earnings call on Friday, noting that there is a “level of urgency, discipline and focus” throughout the organization.