Walgreens plans to close around 1,200 stores across the U.S. as it faces declining consumer spending.
The closures will take place over the next three years, beginning with 500 stores in fiscal year 2025, according to an earnings report released Tuesday. Although the company had previously acknowledged it would close unprofitable locations, it had not specified how many would be affected.
This initiative is part of a multi-year cost-reduction strategy led by CEO Tim Wentworth, who assumed the role last year. In his statement, Wentworth emphasized the company’s focus on enhancing its core retail pharmacy business. “This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” he remarked.
The specific stores targeted for closure have not yet been disclosed, but this decision would affect about 13% of the more than 8,700 Walgreens locations in the U.S. as of August 31 last year. The announcement comes in the context of a fiscal year 2024 that is improving but remains challenging.
Despite achieving a cost reduction of over $1 billion last year, Walgreens reported a $3 billion loss in the most recent quarter. Nonetheless, the company’s revenue increased by more than 6% from the previous year.
In the retail pharmacy sector, fourth-quarter sales reached $29.5 billion, up 6.5% compared to the same quarter last year.
