Pharmacy chain Walgreens intends to shut down a total of 150 stores across the United States and an additional 300 locations in the United Kingdom, Your Content has learned.
This decision aligns with the company’s ongoing efforts to reduce costs and streamline operations.
During the third quarter earnings call on Tuesday, James Kehoe, the executive vice president and global chief financial officer of Walgreens Boots Alliance, disclosed that the company had already implemented various cost-saving measures, including the elimination of over 500 corporate personnel positions.
The specific stores that will be affected by the closures have not been announced, and Walgreens has not responded.
The store closures are expected to be completed before the conclusion of Walgreens’ 2024 fiscal year in May of that year.
In addition to store closures, Walgreens has implemented several other cost-saving measures.
The company reported a net income of $118 million, which was approximately 59% lower than the previous year, failing to meet earnings expectations according to analysts polled by S&P Global Market Intelligence.
As a result, Walgreens has revised its earnings expectations for the full fiscal year.
However, the company remains optimistic about its cost-saving initiatives, with James Kehoe stating during the earnings call that they anticipate saving $3.3 billion by the end of 2023 and an additional $800,000 in 2024.
These savings are crucial in light of the lower-than-expected demand for COVID-19 vaccinations, which experienced an 83% decline compared to the previous year.
The decline in COVID-19 testing also contributed to the company’s underperformance.
Walgreens Boots Alliance CEO, Rosalind Gates Brewer, acknowledged the challenges faced by the company during the earnings call.
She noted that COVID-19 had been an unpredictable factor, and they unfortunately witnessed a decrease in patient willingness to receive vaccinations.
Brewer added that Walgreens currently operates 1,100 locations with reduced operating hours, down from 1,600 at the end of May.
Looking ahead, the company anticipates “emerging challenges” due to lower consumer spending as stimulus funds end and student loan payments resume.
Following the announcement of the company’s earnings, Walgreens’ stock experienced a decline of approximately 10% by the end of Friday, according to U.S.A.Today.