Walgreens reportedly announced June 21 that it plans to shut down a substantial number of its pharmacies in an attempt to cut costs and close underperforming stores.
Shares of Walgreens fell more than 20% Thursday after the company reported that fiscal third quarter earnings fell short of expectations. The company said it plans to close underperforming stores in the coming years among other cost-cutting efforts, CNBC reported Thursday.
The collapse of #walgreens has been unlike anything I’ve ever seen in big retail.
It’s down 24% today and has now lost 80% of its value in under 5 years.
This is America’s largest pharmacy chain .. with over 8,500 stores & more than 300,000 employees.
Simply insane. pic.twitter.com/alOmhLWKkO
— Brian Sullivan (@SullyCNBC) June 27, 2024
“The current pharmacy model is not sustainable,” Walgreens CEO Tim Wentworth told investors Thursday during an earnings call, according to CBS News
“We assumed … in the second half that the consumer would get somewhat stronger” but “that is not the case,” Wentworth told CNBC.
Wentworth also said that “the consumer is absolutely stunned by the absolute prices of things, and the fact that some of them may not be inflating doesn’t actually change their resistance to the current pricing. So we’ve had to get really keen, particularly in discretionary things.”
Only 75% of the company’s stores are responsible for 100% of its adjusted operating income, according to CNBC. (RELATED: Nation’s Largest Pharmacy Chains To Begin Selling Abortion Pills)
At this time, it is unsure where or how many stores will be closed, but if Walgreens were to shut down the 25% of stores that are underperforming, it would result in roughly 2,150 closures, CBS News reported.