Walgreens Continues Turnaround Efforts Ahead of Planned Acquisition by Private Equity Firm
Walgreens Boots Alliance (WBA) saw its second-quarter fiscal 2025 sales increase and its operating loss drop as it continues its turnaround plan and prepares to be acquired.
The retail pharmacy company said in a Tuesday (April 8) earnings release that during the quarter ended Feb. 28, its sales rose 4.1% year over year to reach $38.6 billion and its operating loss dropped from $13.2 billion a year ago to $5.6 billion.
Because of the pending transaction in which it will be acquired by entities associations with private equity firm Sycamore Partners, WBA withdrew its fiscal 2025 guidance and will not host an earnings call for the quarter, according to the release.
“We remain in the early stages of our turnaround plan, and continue to expect that meaningful value creation will take time, enhanced focus and balancing future cash needs with necessary investments to navigate a changing pharmacy and retail landscape,” WBA CEO Tim Wentworth said in the release.
Wentworth said the quarter’s results were helped by the firm’s cost management efforts and improvements in its U.S. Healthcare business, which were partially offset by weaker front-end results in its U.S. Retail Pharmacy business and legal settlements.
During the quarter, WBA saw higher branded drug inflation and prescription volume; lower sales in discretionary categories like beauty, seasonal and general merchandise; and continued softness in U.S. retail sales, according to the release.
WBA announced March 6 that it entered into a definitive agreement to be acquired by an entity affiliated with Sycamore Partners, subject to customary closing conditions.
The retail pharmacy company said at the time that it will continue to operate under Walgreens, Boots and its consumer brands; will keep its headquarters in the Chicago area; and “will be better positioned to become the first choice for pharmacy, retail and health services.”
It said in the Tuesday earnings release that the merger is expected to close in the fourth quarter, pending shareholder and regulatory approvals and other conditions. Upon completion of the transaction, WBA will become a private company.
On March 27, WBA agreed to pay $2.8 million to settle U.S. Justice Department allegations that the company submitted inflated prices to the Massachusetts and Georgia Medicaid programs for generic medications.
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