Walgreens Boots Alliance (WBA) beat Wall Street estimates on 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 $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 saw lower-than-expected sales of over-the-counter flu season vaccines and medicine, as the winter respiratory virus season has not been as bad as in previous years.
The stock traded higher Friday, up 27% to $11.70 a share, on news that the company was moving forward to spin off VillageMD's health care services business. Walgreens has pursued a change in strategy since CEO Tim Wentworth took over in late 2023.
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VillageMD has been performing poorly, leading to an operating loss on Walgreens' books. This quarter it performed slightly better, along with the company's pharmaceutical benefits manager, Shields. Together, they reported a loss of $325 million, compared with a loss of $436 million in the previous 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 the VillageMD controlling stake acquisition in 2021.
The company has faced a number of pressures, which triggered a round of store closures amid a difficult retail environment. Store front sales have typically been a drag on all retail pharmacies in recent years as customers turn to shopping online and through other avenues.
Wentworth highlighted some improvements in the store experience, including a digital waiting list for prescription collection to help customers avoid taking up pharmacists' time while they try to fill prescriptions.
Wentworth said this would give customers the opportunity to shop while they waited. If so, the customers will be faced with groups of products; 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've said it's going to take time … and we're committed to our vision of a pharmacy-led retail organization,” Wentworth said during an earnings call Friday, noting that ” level of urgency, discipline, and focus” across the organization.