Walgreens tops fiscal 2Q forecasts as private equity buyout awaits

Walgreens delivered a better-than-expected fiscal second quarter and smaller loss a month after announcing that it would be bought by a private equity firm.

The drugstore chain booked pharmacy sales gains, and its struggling VillageMD clinic business delivered a smaller balance sheet hit in the recently concluded quarter.

Overall, Walgreens said Tuesday that it lost $2.85 billion compared to a $5.91 billion loss in the previous year's quarter. Adjusted results not counting one-time items totaled 63 cents per share in the most recent quarter. Sales grew 4% to $38.59 billion

Analysts expected fiscal second-quarter earnings of 53 cents per share on about $38 billion in revenue, according to the data firm FactSet.

Walgreens said in March that it had agreed to be acquired by the private equity firm Sycamore Partners in a deal with an equity value of just under $10 billion.

The buyout came as the drugstore chain deals with a host of problems including thin prescription reimbursement, rising costs and a VillageMD clinic business that has struggled to gain traction with patients.

The Deerfield, Illinois, company is cutting costs and closing stores. In January, It said it was suspending a quarterly dividend it has offered for more than 90 years.

Walgreens Boots Alliance Inc. also runs nearly 3,700 international stores, with locations in the United Kingdom, Mexico, Thailand and Ireland. The U.S. segment is the biggest part of its business.

In the recent quarter, Walgreens said its operating loss included a $3 billion, non-cash impairment charge tied partly to its VillageMD business. That compares to a charge of more than $12 billion in the previous year's quarter.

Walgreens withdrew its annual forecast due to its pending deal and did not host a conference call with analysts to discuss results.