Walgreens is closing 1,200 stores, or 14% of its locations, as it fights to turn around its business.
The retail pharmacy chain will be closing the stores over the next three years, the company said in its fourth-quarter earnings Tuesday, which includes 500 in the 2025 fiscal year, which started last month. Walgreens has around 8,700 locations in the US.
Pharmacy chains have been struggling with lower reimbursement rates for prescription drugs, competition from online retailers and an overall drop in consumer spending. Walgreens said earlier in June that it plans to shut down underperforming locations, and rival drugstore chain CVS said weeks ago that it plans to cut thousands of jobs as part of a $2 billion plan to pare down on costs.
Tim WentworthWalgreens CEO Tim Wentworth has been trying to cut costs to turn the company around since he joined a year ago. The company stepped back from its primary care business, closing over 100 VillageMD locations, and is trying to reinvent its core pharmacy business.
“We’re at a point where our current pharmacy model is not sustainable,” Wentworth said in an earnings call Tuesday.
Walgreens made $37.5 billion in sales over the fourth quarter, a 6% increase from the same quarter in 2023. The company did post a $3 billion net loss, mainly attributed to opioid settlements and an investment in China. Walgreens’ shares jumped 12% on Tuesday morning.
The upcoming fiscal year will be an important “rebasing” year as Walgreens focuses on controlling its costs, Wentworth said in a statement.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” he said.
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