Walgreens on Tuesday reported fiscal second-quarter earnings and income that topped expectations, because the retail drugstore large advantages from price cuts and prepares to go non-public.
The corporate is within the technique of being taken non-public by Sycamore Companions in a roughly $10 billion deal that’s anticipated to shut within the fourth quarter of this 12 months. Walgreens withdrew its fiscal 2025 steerage given the pending transaction. In January, it mentioned it expects a full-year adjusted revenue of $1.40 to $1.80 per share.
The historic cope with Sycamore ends Walgreens’ tumultuous run as a public firm, which started in 1927. The corporate is shuttering shops and reducing different prices because it will get squeezed by pharmacy reimbursement headwinds, softer shopper spending, and competitors from its most important rival CVS, grocery and retail chains, and Amazon. It is also grappling with a troubled push into well being care.
Shares of Walgreens rose almost 2% in premarket buying and selling on Tuesday.
Here is what Walgreens reported for the three-month interval ended Feb. 28 in contrast with what Wall Avenue was anticipating, based mostly on a survey of analysts by LSEG:
- Earnings per share: 63 cents adjusted vs. 53 cents anticipated
- Income: $38.59 billion vs. $38 billion anticipated
“Second quarter outcomes mirror disciplined price administration and enchancment in U.S. Healthcare, which had been partially offset by weaker front-end ends in U.S. Retail Pharmacy, whereas vital authorized settlements resulted in continued damaging free money movement,” Walgreens CEO Tim Wentworth mentioned in a launch.
“We stay within the early levels of our turnaround plan, and proceed to anticipate that significant worth creation will take time, enhanced focus and balancing future money wants with essential investments to navigate a altering pharmacy and retail panorama,” he added.
In the course of the fiscal second quarter, Walgreens booked gross sales of $38.59 billion, up 4.1% from the identical interval a 12 months in the past, as gross sales grew in its U.S. retail pharmacy enterprise and worldwide segments.
The corporate reported a web lack of $2.85 billion, or $3.30 per share, for the fiscal second quarter. It compares with a web lack of $5.91 billion, or $6.85 per share, within the year-earlier interval.
Excluding sure objects, adjusted earnings had been 63 cents per share for the quarter.
The outcomes embody a $4.2 billion cost associated to a loss in worth of its U.S. retail pharmacy and funding in primary-care clinic chain VillageMD.
However Walgreens made $1 billion in revenue by cashing out early on a few of its shares of Cencora, a pharmaceutical options group, and benefiting from good points from its funding in BrightSpring, a supplier of complete residence and community-based well being providers. These are two of Walgreens’ prime health-care investments.
The corporate’s working money movement within the second quarter was hit by $969 million in authorized funds for opioid-related settlements and a dispute with virtual-care firm Everly Well being Options, which alleged that Walgreens broke the phrases of a enterprise contract in the course of the Covid-19 pandemic.
