Walgreens Boots Alliance: Initial Successes Despite Unsteady Profit Situation

Walgreens Boots Alliance exceeded analysts' lowered expectations for first-quarter earnings and is maintaining its annual forecast, as announced by the company on Friday. The healthcare company is benefiting from the restructuring efforts of new CEO Tim Wentworth to revive the business. The company's shares, which had dropped by over 60% in value in 2024, experienced a pre-market surge of about 8.9% to $10.04. Walgreens operates the second-largest pharmacy chain in the U.S. as well as the Boots stores in the U.K., and it has already initiated several rounds of closures to improve its profitability and liquidity. CEO Tim Wentworth emphasized: "While the restructuring will take time, the early progress strengthens our confidence in a sustainable, pharmacy-led business model." On a reported basis, the company posted a loss of 31 cents per share, compared to 8 cents the previous year, due to closure costs and other one-time charges. Excluding these one-time effects, Walgreens achieved a quarterly profit of 51 cents per share, surpassing analysts' average estimates of 37 cents. The forecast for an adjusted earnings of $1.40 to $1.80 per share in 2025 was confirmed. The U.S. retail pharmacy division of the company reported sales of $30.9 billion for the quarter ending November 30, exceeding analysts' average estimate of $29.10 billion. In light of low drug reimbursement rates and a cautious consumer base, Walgreens has launched a $1 billion savings program and plans to close more than 1,200 stores and eliminate several leadership positions over the next three years. Furthermore, the company has been gradually selling its stake in the pharmaceutical wholesaler Cencora. Media reports from The Wall Street Journal, Reuters, and others in December suggest that Walgreens is in talks about a sale to private equity firm Sycamore Partners and has also contacted other potential buyers. The company declined to comment on these reports.