Walgreens tops expectations amid ongoing health care push; lifts sales outlook
An early flu season helped give a boost to Walgreens Boots Alliance’s first quarter sales as the pharmacy retailer continues its push into the broader healthcare arena.
Walgreens also raised its full-year sales guidance to $137.5 billion from $133.5 billion based on its plans to acquire healthcare provider Summit Health-CityMD. As a result of the transaction, which was announced in November, Walgreens raised its U.S. healthcare fiscal year 2025 sales goal to $14.5 billion to $16.0 billion, from $11.0 billion to $12.0 billion previously.
Walgreens is also is upping its investment in the fast-growing specialty pharmacy business. In October, it said it would buy the remaining 30% stake in specialty pharmacy company Shields Health Solutions that it doesn’t already own for an estimated $1.37 billion.
Walgreens swung to an unadjusted loss of $3.7 billion, or $4.31 per share, for the quarter ended Nov. 30, compared with net income of $3.58 billion, or $4.13 per share, in the year-ago period. The loss was driven by $5.2 billion Walgreens paid for a settlement related to opioid litigation. The company’s adjusted earnings came to $1.16 per share, topping analysts estimates of $1.14 per share.
Sales inched down 1.5% to $33.4 billion as increased sales for cough and cold medicines and a boost in beauty sales helped to make up for declining demand for COVID vaccines and related home test kits. Analysts had estimated revenue of $32.84 billion.
Walgreens’ U.S. retail pharmacy segment’s sales fell 3% to $27.2 billion. Comparable sales increased 3.8% while lapping strong comparable sales of 7.9% in the year-ago quarter, which included a significant contribution from COVID-19 vaccinations.
“WBA delivered a solid start to the fiscal year, as we continue to accelerate our transformation to a consumer-centric healthcare company,” said CEO Rosalind Brewer. “We're making significant “progress in driving our U.S. Healthcare segment to scale and profit, including the recent VillageMD acquisition of Summit Health. Our core retail pharmacy businesses in both the United States and United Kingdom remain resilient in challenging operating environments. Execution across segments reinforces our confidence in achieving full-year guidance, and our strategic actions are creating long-term shareholder value."
The company maintained its full-year earnings per share guidance of $4.45 to $4.65, versus estimates of $4.50.
Walgreens Boots Alliance operates approximately 13,000 locations across the U.S., Europe and Latin America, including nearly 9,000 locations across the United States, Puerto Rico and the U.S. Virgin Islands.