Walgreens Boots Alliance Reports $2.9 Billion Net Loss, Revenue Increases 4.1% in Q2 Fiscal 2025

Walgreens Boots Alliance, Inc. reported a net loss of $2.9 billion for the second quarter of fiscal 2025, a significant improvement from a net loss of $5.9 billion in the same period last year. The company's revenue for the quarter increased by 4.1% to $38.6 billion, driven primarily by growth in pharmacy sales, which rose 8.9%. However, the company faced challenges with retail sales, which decreased by 5.5% due to store closures and a challenging consumer environment. The gross profit for the quarter was $6.9 billion, down from $7.0 billion a year earlier, reflecting pressures on pricing and promotions.

In terms of operational changes, Walgreens is undergoing a Footprint Optimization Program aimed at closing 900 to 1,000 underperforming stores by the end of fiscal 2027. As part of this initiative, the company closed 247 stores in the first half of fiscal 2025. The company anticipates that these closures will enhance its operational efficiency and align its footprint with evolving consumer behaviors. Additionally, Walgreens has suspended its quarterly cash dividend to strengthen its balance sheet and improve cash flow as it navigates through ongoing litigation and debt obligations.

The company also recorded substantial impairment charges during the quarter, including a $3.7 billion charge related to goodwill and other long-lived assets, primarily in its U.S. Retail Pharmacy and VillageMD segments. This impairment reflects the ongoing challenges in the healthcare market and the impact of recent legal settlements. Despite these challenges, Walgreens reported adjusted operating income of $785 million for the quarter, down from $900 million a year ago, indicating ongoing efforts to manage costs and improve profitability.

Looking ahead, Walgreens has entered into a merger agreement with Blazing Star Parent, LLC, which is expected to close in the fourth quarter of calendar 2025, pending regulatory approvals. Under the terms of the agreement, shareholders will receive $11.45 per share in cash and a Divested Asset Proceed Right, which could provide additional value based on future monetization of certain assets. The company is also focused on stabilizing pharmacy margins and enhancing its retail strategy to adapt to changing market conditions.

As of February 28, 2025, Walgreens had total assets of $70.2 billion and total liabilities of $63.0 billion, with cash and cash equivalents decreasing to $702 million from $1.3 billion at the end of the previous fiscal year. The company continues to explore strategic monetization of non-core assets and is committed to improving its financial position as it navigates through a complex operational landscape.