Walgreens announced that it will be closing a “significant” number of underperforming stores across the country. The pharmacy chain’s stock plummeted by more than 20% in early trading on Thursday (June 27) after the company announced its third-quarter earnings fell short of expectations, citing a “challenging” environment.
“We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins,” said CEO Tim Wentworth.
In addition to the closures, Walgreens will also be scaling back on its venture into the primary care market by reducing its stake in VillageMD.
“Informed by our strategic review, we are focused on improving our core business: retail pharmacy, which is central to the future of healthcare,” Wentworth added.
“We are addressing critical issues with urgency and working to unlock opportunities for growth.”
The company did not say how many of its 8,700 stores will close, but Wentworth told The Wall Street Journal they are looking at about 25% of underperforming locations. He said that the closures would represent a “meaningful percent” of those pharmacies.
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