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Walgreens gave investors some much-needed good news on Friday, reporting Q1 2025 results that were better than what analysts had expected.
In response, the retail pharmacy giant’s stock shot up more than 25% from $9.49 to $11.99, a refreshing change for a company that saw its shares plummet 63% in 2024.
But don’t get too excited—overall results were a bit of a mixed bag. The company reported a $265 million net loss for the quarter, compared to a $67 million net loss for the same period last year. On the other hand, it brought in $39.5 billion in total sales for Q1, a 7.5% increase from the previous year’s $36.7 million.
And anyone hoping to hear an update on the speculation around Walgreens selling itself to private equity firm Sycamore Partners was probably disappointed, as neither CEO Tim Wentworth nor other execs gave any mention of it during the earnings call.
Turning it around. Following a tough 2024, Walgreens executives announced a turnaround strategy in October that included doubling down on the retail pharmacy business, closing 1,200 underperforming stores, and selling off some subsidiaries, including primary care clinic operator VillageMD.
So far, the store closures are going “better than expected on multiple facets, including script retention and employee engagement,” Wentworth said during the earnings call.
In the company’s Q1 2025, which ended November 30, Walgreens closed roughly 70 stores and plans to close another 450 by the end of the year, according to Wentworth. Walgreens has put together a “dedicated team” to focus solely on managing the store closures, he added.
Village for sale. Despite its US Healthcare segment—which includes VillageMD—performing better in Q1 than it did the same quarter last year, Walgreens is still planning to sell off the Village Medical physician practices that VillageMD operates, Wentworth said.
The segment brought in $2.2 billion in Q14, compared to $1.9 billion last year.
Wentworth added that execs are “continuing to evaluate the best options” for Summit Health-CityMD, another primary care clinic operator VillageMD bought in January 2023 for $8.9 billion, $3.5 billion of which came from Walgreens.
Cautiously optimistic. Analysts expressed some optimism about Walgreens’s better-than-expected report, but noted that there’s still much work to be done to get the company back in good shape.
“This was a good quarter, made sweeter by solid business execution in a challenging environment,” financial services firm Edward Jones analyst John Boylan said in a note shared with Healthcare Brew. “However, we think it is premature to say that Walgreens is on a stable path to growth.”
Walgreens is managing its costs well and its turnaround strategy is “sound,” but it “may take time and is not without risk,” Boylan added.
Healthcare investment bank Leerink Partners senior research analyst Michael Cherny echoed this sentiment in a note, writing that “[Walgreens’s] quarterly performance was better than expected, but the number of moving parts in the broader [Walgreens] story remain numerous and unchanged.”