Walgreens Boots Alliance Reports $175 Million Net Loss in Q3 Fiscal 2025

Walgreens Boots Alliance, Inc. reported a net loss of $175 million for the third quarter of fiscal 2025, a significant decline from a net profit of $344 million in the same period last year. This translates to a loss of $0.20 per diluted share, compared to earnings of $0.40 per share in the prior year. The company's total sales for the quarter reached $38.99 billion, marking a 7.2% increase from $36.35 billion in the previous year. However, the increase in sales was overshadowed by higher costs and a substantial impairment charge related to goodwill and long-lived assets.

For the nine months ending May 31, 2025, Walgreens reported a net loss of $3.29 billion, an improvement from a loss of $5.63 billion in the same period last year. The company attributed the current year's losses to $4.3 billion in impairment charges, primarily related to its VillageMD and U.S. Retail Pharmacy segments. Adjusted net earnings for the nine-month period were $1.32 billion, down from $2.15 billion in the previous year, reflecting ongoing challenges in the retail pharmacy market and increased operational costs.

Strategically, Walgreens is undergoing a significant transformation, including a merger agreement with Blazing Star Parent, LLC, which is expected to close in the third or fourth quarter of 2025, pending regulatory and shareholder approvals. Under the terms of the merger, shareholders will receive $11.45 per share in cash and a Divested Asset Proceed Right, which could yield additional payments based on future asset monetization. The company is also implementing a Footprint Optimization Program aimed at closing 900 to 1,000 underperforming stores by the end of fiscal 2027, with 423 stores already closed in the current fiscal year.

Operationally, Walgreens reported a decline in retail sales, which fell by 5.3% in the latest quarter, while pharmacy sales increased by 11.8%. The company filled 307.6 million prescriptions during the quarter, a slight increase from the previous year. The U.S. Healthcare segment, which includes VillageMD, reported a decrease in sales due to lower risk-based revenue, although CareCentrix and Shields experienced growth. The company continues to focus on cost control and improving operational efficiency amid a challenging retail environment.

Looking ahead, Walgreens anticipates ongoing challenges due to macroeconomic conditions, including inflation and supply chain disruptions, which may impact its financial performance. The company has suspended its quarterly cash dividend to strengthen its balance sheet and improve cash flow as it navigates these challenges and works towards completing the merger.