Walgreens had a better-than-expected fiscal first quarter and gave Wall Street hope for the drugstore chain’s plan to revive its struggling business, reported the Associated Press.

“CEO Tim Wentworth told analysts the company has had success modifying contracts with commercial insurers as well as Medicare and Medicaid plans that pay for prescriptions … He also said the company has done better than expected in shifting prescriptions from U.S. stores it is closing to other Walgreens locations that remain open,” wrote AP.

NACS Daily reported in October that Walgreens was set to close about 1,200 locations over the next three years.

According to AP, Walgreens closed 70 stores in its fiscal first quarter and plans to shutter around 500 this year. Those stores still face problems, including a consumer who is buying less due to inflation and persistent theft, which Wentworth referred to as “hand-to-hand combat.”

Chain Store Age reported that by segment, U.S. retail pharmacy business sales increased 6.6% to $30.9 billion. Same-store sales rose 8.5%. Retail sales fell 6.2%, with comp sales down 4.6%, reflecting a weaker cough-cold-flu season and lower sales in discretionary categories.

Edward Jones analyst John Boylan told AP that “it is premature to say that Walgreens is on a stable path to growth,” and noted that “prescription reimbursement changes will take time and their impact remains uncertain,” reported AP.

Around the same time Walgreens announced it would close 1,200 stores, CVS was also closing stores while Rite Aid emerged from bankruptcy protection.