Walgreens to Shutter 1,200 U.S. Stores Over Next Three Years
By Isabelle Durso October 15, 2024 4:28 pm
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Walgreens will shrink its U.S. footprint by approximately 1,200 stores over the next three years, the company announced Tuesday.
The drugstore chain, which has nearly 9,000 locations nationwide, said in an earnings report that it will start by closing about 500 stores in 2025. Walgreens announced the plan in June but did not disclose the number of affected stores.
Walgreens has announced a loss of $10.01 per share so far this year, a whopping 180.4 percent jump compared to the same period last year. Operating losses so far in 2024 have been $14.1 billion — a 104.5 percent increase from the same period last year — while net loss was $8.6 billion, up 180.4 percent from last year, the report found.
“In fiscal 2025, we are focusing on stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow, and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future,” Walgreens Boots Alliance CEO Tim Wentworth said in a statement.
A spokesperson for Walgreens did not immediately respond to a request for further comment.
Walgreens’ operating loss was $978 million during the company’s fiscal fourth quarter of 2024, which ended on Aug. 31, an increase of 117.1 percent compared to the same quarter in 2023, according to the report. In addition, net losses in the fourth quarter totaled $3 billion, compared to a net loss of $180 million last year.
The drugstore chain has blamed the financial setbacks on slower consumer spending, higher inflation and lower drug reimbursement rates, the New York Post reported.
However, Walgreens’ sales so far this year total $147.7 billion — an increase of 6.2 percent from this time last year — and sales in the fourth quarter were $37.5 billion — up 6 percent from 2023 — the report found. Walgreens’ U.S. retail pharmacy segment also saw fiscal fourth-quarter sales of $29.5 billion, a 6.5 percent increase from last year, the company said.
Still, retail sales decreased by 3.5 percent during the fourth quarter, “reflecting a challenging retail environment and continued channel shift,” Walgreens said in its quarterly report. The drugstore chain announced the store closures as a way to combat those trends.
It’s unclear where Walgreens intends to close stores, but the announcement could affect New York City’s 82 locations, according to data from LocationsCloud.
Walgreens will likely prioritize “poor-performing stores” where it owns the properties or where leases are expiring, The Associated Press reported.
“Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation,” CEO 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.”
The news comes as several drugstore chains experience setbacks, such as CVS, which has been forced to close hundreds of stores in the wake of the pandemic, and Rite Aid, which just emerged from Chapter 11 bankruptcy after reporting billions in losses.
Isabelle Durso can be reached at idurso@commercialobserver.com.
