Walgreens to close 'significant' number of underperforming stores, cuts profit forecast

[mystery-ak]

Published June 27, 2024 9:03am EDT
Walgreens to close 'significant' number of underperforming stores, cuts profit forecast
Retail pharmacy chain cited a 'difficult operating environment'

By Daniella Genovese FOXBusiness


Walgreens on Thursday announced plans to close a "significant" number of underperforming stores across the U.S. due to ongoing challenges with profitability and declining margins.

The store closures are part of the company's multi-year footprint optimization program. While Walgreens didn't specify how many of its more than 8,700 stores will be affected, CEO Tim Wentworth told The Wall Street Journal that a "meaningful percent" of the underperforming locations would shutter.

Walgreens shares tumbled in pre-market trading on Thursday after the company cut its 2024 profit forecast. Over the past year, shares have dropped over 45%.

more
https://www.foxbusiness.com/lifestyle/walgreens-close-significant-number-underperforming-stores-cuts-profit-forecast

[Gefn]

Walgreens will close a “significant portion” of its 8,600 U.S. locations over the next three years as it struggles to keep up with a rapidly evolving retail pharmacy industry, the company announced Thursday.

“We are at a point where the current pharmacy model is not sustainable and the challenges in our operating environment require we approach the market differently,” Walgreens chief executive Timothy Wentworth said Thursday during the company’s quarterly earnings call. “We do not expect an improvement in the U.S. retail environment.”

The pharmacy giant, based in Deerfield, Ill., said 25 percent of its stores are underperforming and will be considered for closure. The majority of employees will be moved to other stores, Wentworth said.

While the company did not identify specific locations for closure, the scope of the move could put more Americans at risk of living in pharmacy deserts.


https://www.washingtonpost.com/business/2024/06/27/walgreens-store-closures/

[IsailedawayfromFR]

Have owned stock in Walgreens for 30 years.

The company has been going downhill ever since CEO Charles Walgreen III stepped down.

The most recent CEO was fired as she was a diversity hire who knew nothing about running a pharmaceutical business.

Sorry I didn't sell when Charles bid farewell to the job of running what was a very productive company/

[Smokin Joe]

How much of this is due to 'unprofitability' from looting and in urban locations?

[mountaineer]

How much of this is due to 'unprofitability' from looting and in urban locations?

The announcement notes that those stores affected the most by crime likely will close. I also expect a few in our area - in small towns - will close. Maybe they'll maintain their presence in the suburbs. I would think those stores would be the most profitable.

See also this thread on the closures of Rite-Aid stores.

[GtHawk]

Here where I am the Walgreens business model was to put up many vey small corner stores to kill the small pharmacy business and then build a big store and shutter all the small ones leaving a bunch of ugly deteriorating vacant buildings. I'm not surprised they couldn’t sustain themselves.