Walgreens Boots Alliance Reports Q1 2025 Earnings Decline

2025-01-11 companies

Deerfield, Friday, 10 January 2025.
Walgreens Boots Alliance experiences a 23% drop in adjusted net earnings for Q1 2025, reflecting challenges in U.S. retail sales and ongoing efforts to stabilize the pharmacy sector.

Financial Performance Overview

Walgreens Boots Alliance (WBA) reported significant financial challenges in its first quarter of fiscal 2025, ending November 30, 2024. The company posted a net loss of $265 million, or $0.31 per share, compared to a loss of $67 million, or $0.08 per share, in the same period last year [1][3]. Despite these challenges, total sales reached $39.5 billion, marking a 7.5% increase year-over-year [1]. Adjusted earnings per share came in at $0.51, exceeding Wall Street expectations of $0.37 [4].

Strategic Restructuring Initiatives

In response to ongoing challenges, Walgreens has announced an aggressive store optimization strategy. The company plans to close 1,200 underperforming stores over the next three years, with 500 closures targeted specifically for fiscal 2025 [2]. This decision comes as part of a broader turnaround strategy, with CEO Tim Wentworth emphasizing the company’s focus on ‘stabilizing the retail pharmacy by optimizing our footprint’ [1][5]. Currently, Walgreens operates approximately 8,500 retail pharmacy locations across the United States [2].

Segment Performance

The U.S. retail pharmacy division, Walgreens’ largest segment, generated $30.87 billion in sales during Q1, representing a 6.6% increase from the previous year. Pharmacy sales showed strong performance with a 10.4% rise, while the company filled 316.3 million prescriptions, up 1.5% year-over-year [2]. The international business segment demonstrated robust growth with sales of $6.43 billion, marking a 10.2% increase from the previous year [2]. The U.S. healthcare segment reported revenues of $2.17 billion, showing a 12% improvement compared to the same period last year [2].

Forward Outlook

Despite current challenges, Walgreens maintains its fiscal 2025 adjusted earnings guidance of $1.40 to $1.80 per share [1][4]. The company is implementing new operational strategies, including refined labor forecasting and scheduling, with a new model launching in approximately 200 locations in January 2025 [2]. However, CEO Wentworth acknowledges that the turnaround ‘will take time,’ particularly given the ‘persistent deterioration in consumer discretionary spending’ [5].

Sources

Walgreens earnings fiscal 2025