Walgreens Beats Earnings Expectations Amid Store Closures and Cost Cuts

Walgreens Boots Alliance reported fiscal first-quarter earnings and revenue that exceeded Wall Street expectations on Friday, as the company continues to shutter underperforming stores and cut costs to stabilize its operations. The results come amid a challenging year marked by softer consumer spending and operational hurdles.

For the three-month period ending Nov. 30, Walgreens posted sales of $39.46 billion, a 7.5% increase from the same period last year. Despite the revenue growth, the company reported a net loss of $265 million, or 31 cents per share, compared to a net loss of $67 million, or 8 cents per share, a year earlier. The loss was primarily driven by higher operating costs tied to its multiyear plan to close 1,200 underperforming stores, including 500 in fiscal 2025 alone.

Excluding certain items, adjusted earnings were 51 cents per share, surpassing analysts’ expectations. Walgreens also maintained its fiscal 2025 adjusted earnings guidance of $1.40 to $1.80 per share. Shares of the company surged approximately 10% in premarket trading following the announcement.

Walgreens CEO Tim Wentworth attributed the results to the company’s disciplined execution of its 2025 priorities, which include optimizing its retail pharmacy footprint, controlling operating costs, and improving cash flow. “While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model,” Wentworth said in a statement.

The company’s U.S. retail pharmacy division, which operates its drugstores, generated $30.87 billion in sales, a 6.6% increase from the previous year. Pharmacy sales rose 10.4%, driven by price inflation in brand medications, while retail sales declined 6.2% due to a weaker cough, cold, and flu season and lower discretionary spending.

Walgreens’ U.S. health-care unit saw sales jump 12% to $2.17 billion, reflecting growth in primary-care provider VillageMD and specialty pharmacy company Shields Health Solutions. Internationally, the company’s sales increased 10.2% to $6.43 billion, with its U.K.-based Boots chain contributing a 4.5% rise in sales.

The results come as Walgreens navigates a challenging retail environment and explores strategic options, including potential talks with private equity firm Sycamore Partners. The company operates approximately 8,500 retail pharmacy locations across the U.S.