OAN Staff James Meyers
8:22 AM – Tuesday, October 15, 2024
Walgreens announced Tuesday that it plans to close 1,200 stores over the next three years as it looks to downsize.
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The company said that 500 of the closings would take place over the next 12 months. It also estimated that almost a quarter of its 8,700 locations in the U.S. are not profitable.
Walgreens made the announcement as part of its fiscal fourth-quarter and full-year earnings, which ended up beating Wall Street’s expectations.
Additionally, CEO Tim Wentworth acknowledged that the company was working on a “turnaround” that would “take time.”
“We are confident it will yield significant financial and consumer benefits over the long term,” Wentworth said.
Meanwhile, the pharmaceutical chain reported revenue of $37.55 billion for the fiscal fourth quarter, up 6% from the same time last year.
The company also reported a net loss of $3 billion, or $3.48 per share, for the quarter.
Shares of Walgreens Boost Alliance increased more than 4% in premarket trading on Tuesday.
Wentworth said for fiscal 2025, that Walgreens plans to focus “on stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow, and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future.”
Additionally, Walgreens and rival CVS are currently facing a difficult task of continuing to be profitable as consumers continue to get their products online.
“The retail pharmacy industry is going through a period of soul-searching, trying to understand the best model to reach the consumer,” Neil Saunders, GlobalData’s retail managing director, told CNBC in August.
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