Walgreens Boots Alliance Earnings Preview: What to Expect
As the first quarter of fiscal 2025 comes to a close, Walgreens Boots Alliance (WBA) is gearing up to release its earnings report on Friday. Analysts anticipate the results will largely meet expectations, with revenue projected to reach $37.3 billion and earnings per share estimated at $0.38, according to Bloomberg.
Buyout Talks and Cost-Savings Strategy
Investors are eagerly awaiting updates on potential buyout talks with Sycamore Partners, which have been ongoing since December. However, JPMorgan analyst Lisa Gill believes there may not be any significant updates on Friday. Instead, she is focusing on the company’s cost-savings strategy, implemented since CEO Tim Wentworth took the helm in 2023. “We expect management to prioritize store closures and cost savings programs in their strategic focus,” Gill noted.
Key Areas to Watch
Beyond buyout talks and cost savings, several other areas will be under scrutiny. These include prescription volume, further store closures, and the performance of VillageMD. Additionally, front-of-store sales, which have been a weak spot for the industry, are expected to continue weighing on earnings in the new year.
Front-of-Store Sales: A Persistent Challenge
According to Gill, front-end weakness is not a new trend for WBA, and recent quarters have seen promotional activities deployed to combat this issue. However, Bloomberg card data indicates that year-over-year declines persisted through the first quarter of 2025, with declines worse than the previous quarter. As a result, gross margins are expected to remain soft until front-end growth improves.
A Closer Look at Walgreens Boots Alliance
As the company prepares to release its earnings report, investors will be watching closely for signs of progress in these key areas. With the healthcare landscape constantly evolving, WBA’s ability to adapt and innovate will be crucial to its success in the coming year.
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