Walgreens is finalizing a plan to address its underperforming stores, with the potential closure of hundreds of additional stores in the U.S. over the next three years.
CEO Tim Wentworth indicated to analysts on Thursday that approximately 25% of the company’s stores are underperforming and may face imminent changes. The company currently operates over 8,600 stores in the United States.
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The big picture: The plan may involve the closure of a significant portion of the roughly 2,100 underperforming stores if they do not improve. Additionally, the company has already closed 2,000 locations over the past decade.
- Walgreens and other major competitors such as CVS and Rite Aid have been adjusting to market challenges, including tight reimbursement for prescriptions, rising operational costs, and increased competition from retailers like Walmart and Amazon.
- Consumers have become more price-conscious, leading to greater competition for sales of non-pharmacy items.
Go deeper: Walgreens has also been re-evaluating its strategy regarding VillageMD primary care clinics, reversing its previous expansion plans and closing around 160 clinics.
- The company aims to ensure profitability for these clinics and is focusing on growing other parts of its business like specialty pharmacy.
- Walgreens reported a third-quarter earnings miss and lowered its annual forecast, citing adjusted earnings to range from $2.80 to $2.95 per share for the fiscal year, down from a previous range of $3.20 to $3.35 per share.
