Walgreens Slashes 2024 Profit Forecast and Reveals Plans for Store Closures

Walgreens Slashes 2024 Profit Forecast and Reveals Plans for Store Closures

(Reuters) -As its retail operations are negatively impacted by low consumer spending Walgreens Boots Alliance announced on Thursday that it would eliminate more underperforming U.S. locations and lowered its profit prediction for the fiscal year 2024.

After falling 40% so far this year, the Illinois-based company’s shares plunged more than 15% in premarket trade.

The pharmacy chain operator announced that it was wrapping up a “significant multi-year” program to eliminate some of its more than 8,700 stores, without disclosing the exact number of closures. The review was concentrated on a quarter of its U.S. sites.

CEO Tim Wentworth told the Wall Street Journal that Walgreens may close a “meaningful percent” of the shops under examination over the coming years.

When Reuters asked the company for comment regarding specifics regarding store closures, the company did not answer right away.

Investors are counting on Wentworth, who joined the company in October of last year, to lead strategy and cost-cutting initiatives at Walgreens, as the pharmacy chain faces dwindling demand at its retail operations as a result of consumers growing weary of inflation and sluggish sales of COVID products.

Additionally Walgreens wants to streamline its medical offerings across the nation, which includes VillageMD, a primary care provider.

Wentworth informed WSJ that the business will no longer hold a majority stake in VillageMD.

February 2024 saw Walgreens have closed 484 stores in the UK and 625 stores in the U.S., according to a regulatory filing.

After predicting an adjusted profit of $3.20 to $3.35 per share in March, the company now projects an adjusted profit of $2.80 to $2.95 per share for its fiscal year ending in August.

Based on LSEG statistics, analysts anticipate it to make $3.20 per share in annual profits on average. In comparison to projections of 68 cents per share, the company’s adjusted earnings for the third quarter came in at 63 cents per share.

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