Walgreens Boots Alliance reported a $245 million operating loss in the first quarter of fiscal 2025, the three months ending Nov. 30, a substantial drop from the $39 million operating loss recorded in the same quarter in FY 2024.
"Our first quarter results reflect our disciplined execution against our 2025 priorities: stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models," CEO Tim Wentworth said in a Jan. 10 news release. "While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model."
Eight things to know:
1. The increased losses were driven by higher costs from Walgreens' footprint optimization program and lower U.S. retail sales, according to the company. Adjusted operating income was $593 million, down from $687 million, reflecting reduced sales and prior-year sale-leaseback gains, partially offset by cost savings and growth in the company's U.S. healthcare segment.
2. Net loss widened to $265 million from $67 million in the quarter, with adjusted net earnings down 23% year over year to $440 million due to lower adjusted operating income. Loss per share was $0.31, compared to $0.08 a year ago. Adjusted earnings per share dropped to $0.51 from $0.66, down 23.4% on a constant currency basis.
3. Walgreens' first-quarter sales rose 7.5% year over year to $39.5 billion, or 6.9% on a constant currency basis, with growth across all segments.
4. The U.S. retail pharmacy segment reported $30.9 billion in first-quarter sales, up 6.6% year over year, with an 8.5% rise in comparable sales. Pharmacy sales grew 10.4%, and comparable pharmacy sales increased 12.7%, driven by higher branded drug inflation and prescription volume. Comparable prescriptions rose 2.3% — 3.5% excluding immunizations — while total prescriptions filled grew 1.5% to 316.3 million.
5. The U.S. healthcare segment posted $2.2 billion in first-quarter sales, with growth across all businesses: VillageMD up 9%, CareCentrix up 16% and Shields up 30%. The segment's operating loss narrowed to $325 million from $436 million in the prior-year period, driven by improved performance at VillageMD and Shields. Adjusted operating income reached $25 million, compared to a $96 million loss in the same period last year.
6. Walgreens is reportedly in talks to sell to New York City-based Sycamore Partners and go private, according to The Wall Street Journal. Sources close to the deal told the publication that the transaction could close in early 2025.
7. The company plans to close about 1,200 retail stores over the next three years, including around 500 closures in FY 2025.
8. Walgreens reported a $978 million operating loss in the fourth quarter of 2024, a 117.1% increase compared to the same quarter in fiscal 2023. Net loss for the quarter was $3 billion, compared to a $180 million net loss during the same period in 2023.