Walgreens' Q1 2025 financial results reveal a 7.5% revenue increase despite wider losses, highlighting strategic initiatives to streamline operations and enhance store performance for future stability

Table of Content

Q1 2025 Performance Key Highlights Future Outlook
 

Walgreens reported financial outcomes surpassing analyst predictions with a revenue increase of 7.5% year-over-year, reaching $39.5 billion. Despite this growth, the company experienced a significant net loss of $265 million, an increase from the $67 million loss reported in the same quarter last year, primarily attributed to expenses related to continued store closures and asset sales.

Q1 2025 Performance 

Revenue Growth: Walgreens posted a revenue of $39.5 billion, a 7.5% increase year-over-year, beating analyst expectations.

Net Loss: The company reported a net loss of $265 million, significantly larger than the $67 million loss from the same period last year. The increased loss was mainly due to costs associated with ongoing store closures and asset sales.

Cost-Cutting Initiatives: Executives highlighted progress in the company's $1 billion cost-cutting initiative during the quarter. Key actions included the pending sale of the medical chain Village MD and the closure of 70 underperforming retail stores.

 

Key Highlights 

U.S. Retail Pharmacy: This segment saw a 6.6% increase in sales to $30.9 billion, driven by a 10.4% rise in pharmacy sales due to higher branded drug prices and increased prescription volumes.

International Operations: Sales surged by 10.2% to $6.4 billion, buoyed by strong performance in pharmacy and retail sectors, particularly in Germany and the UK.

U.S. Healthcare: The segment, despite a slight operating loss, showed considerable sales growth, bolstered by improved performances at VillageMD and CareCentrix.

Footprint Optimization Program: The ongoing strategy to close underperforming stores and sell certain assets continues to impact financials but is expected to lead to a leaner, more efficient operational model in the long term.

Strategic Focus on Micro-Fulfillment Centers

Expansion Plans: CEO Tim Wentworth announced plans to increase the number of stores serviced by micro-fulfillment centers to nearly 6,000 in the next 12 months. This marks a strategic shift from the previous year's pause on new centers to enhance productivity and operational efficiency at existing facilities.

Current Infrastructure: Currently, Walgreens operates 11 micro-fulfillment centers, servicing over 4,500 stores. This infrastructure plays a critical role in accelerating prescription delivery and reducing fulfillment times.

According to Grocery Doppio, 71% of grocers are investing in advanced fulfillment solutions to tackle challenges posed by high operational costs and the demand for efficient online order fulfillment. These investments are pivotal in addressing the logistics strain caused by increased online orders and maintaining profitability in a highly competitive, price-sensitive market.

 

Future Outlook

The outlook for retail comp sales for fiscal 2025 is to decline approximately 4% to 5% compared to our prior outlook of down 2% to 3%, considering the challenging US retail environment.

For more grocery insights, explore Grocery Doppio and our report 2025 Digital Grocery Outlook: Profitability, Fulfillment, and Personalization.