Walgreens Earnings Has Jim Cramer Shook as Retails “Walking Dead” Stock Finds Pulse…

Walgreens Boots Alliance is up 24.6% YTD and, against all odds, just posted an earnings quarter that didn’t look like a crime scene. Even Jim Cramer… the man who’s been warning viewers that Walgreens was about to join the ranks of the undead… had to admit he didn’t see this one coming. “First upside surprise I can recall,” he said, presumably cursing the company to hell with his optimism. 

(Source: Giphy) 

In short, Walgreens, the company that’s been playing retail’s answer to the Walking Dead for years, is in the process of being taken private by Sycamore Partners. If you’re not familiar, Sycamore is the kind of private equity firm that buys your local mall after the last Sbarro closes and then tries to sell it back to you as “mixed-use.” This $10 billion deal is basically Walgreens’ last shot to avoid the fate of every other retail dinosaur: liquidation, meme stock status, or a cameo in a Michael Lewis book.

(Source: Yahoo Finance) 

So with that, what actually happened? Walgreens just posted Q3 sales of $39 billion, a 7% jump, while pharmacy sales are up 12%, and adjusted EPS at $0.38 (beating the $0.34 whisper number). Not bad for a company that’s been closing stores like they’re giving out prizes for fastest retreat. Even the analysts had to squint and admit: okay, maybe this isn’t a total grease fire.

But, but, but… looking deeper, Walgreens still isn’t technically “slaying”. They still lost $175 million this quarter and operating income got chopped in half to $53 million. Retail sales fell over 5%, while the “front end”... a.k.a. The place where you buy stale pretzels and chips before checking out… is still in a coma.

(Source: Giphy) 

Which is why the “turnaround plan” is basically corporate spring cleaning on steroids: close 1,200 stores, dump VillageMD (because primary care is apparently just a fancy way to light money on fire), and try to squeeze a few more drops of margin out of what’s left. Shields and CareCentrix are the only business lines that aren’t actively embarrassing (both up 25% and 12%, respectively. Meanwhile, Walgreens didn’t even bother with an earnings call. They just yeeted the numbers into the void and withdrew 2025 guidance. Mic = dropped. 

And yet, there’s still a pulse. Pharmacy comps up 15%. Free cash flow is actually positive with margins being at 0.9%. Net loss for the first nine months “only” $3.3 billion… which is down from last year’s $5.6 billion. Bigly. 

(Source: Giphy)

So yeah, there’s definitely progress being made… especially considering Cramer is stunned. As for other analysts, they’re putting on a brave face. Ann Hynes at Mizuho called the pharmacy trends a “positive read-through for CVS,” which is a polite way of saying, “at least you’re not Rite Aid.” Leerink’s Michael Cherny called the results “solid relative to market expectations.” And for that reason, Sycamore is still rolling the dice. Meaning, if you’re still long, I admire your emotional resilience through the valleys with this company. 

Now sure, the company is still a hot mess, but at least it’s a hot mess with private equity money and a pharmacy segment that refuses to die. So with that, keep your eyes on more interesting price action as we kick off Monday’s opening bell and place your bets accordingly. Until next time, friends… 

At the time of this publishing, Stocks.News does not hold positions in companies mentioned in the article.