Walgreens to close underperforming stores

Walgreens plans to close a significant number of its about 8,600 stores due to poor performance.

Officials with the pharmacy chain said they were finalizing a multiyear plan to “close certain underperforming U.S. stores.”

Walgreens Boots Alliance CEO Tim Wentworth told The Wall Street Journal on Thursday that the company had yet to settle on a final number of locations to close as it reviews numbers from a quarter of its stores that are not profitable. Wentworth said Walgreens could close a “meaningful percent” of the locations in the coming years.

He added that the company expects to be able to reassign impacted employees so that a reduction in the company’s retail footprint wouldn’t create “a meaningful loss of jobs,” according to the Journal.

In a call with analysts, Wentworth said that the store closures will take place over the next three years, Bloomberg News reported.

“We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins,” Wentworth said in a statement. “Our results and outlook reflect these headwinds, despite solid performance in both our International and U.S. Healthcare segments.”

Walgreens and other retail pharmacy chains like Rite Aid and CVS have announced the closures of hundreds of stores in recent years as it deals with lower prescription drug reimbursements and rising costs, The Associated Press reported.

Wentworth said the company is “focused on improving our core business: retail pharmacy, which is central to the future of healthcare.”

“We are addressing critical issues with urgency and working to unlock opportunities for growth,” he said. “Many of these actions will take time, but I am confident that we have the right team and the right strategy to lead a business turnaround for the Walgreens that our customers and patients need.”

On Thursday, Walgreens reported $344 million in net earnings in its third fiscal quarter of 2024, with adjusted results coming out to 63 cents per share.

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