Walgreens to close down underperforming shops and scale back funding in primary-care companies – NaturalNews.com

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July 2, 2024

Walgreens to close down underperforming shops and scale back funding in primary-care companies

The chief govt of pharmacy chain Walgreens Boots Alliance has introduced the corporate’s plan to close underperforming stores and scale back funding within the primary-care enterprise.

Throughout an interview with the Wall Road Journal, Tim Wentworth, who grew to become CEO final October after a profession in managing drug advantages, revealed that Walgreens skilled a 10 percent drop in pre-market trading on June 27 following the announcement of its quarter three earnings, which missed Wall Road’s expectations.

In response to its Q3 report, Walgreens disclosed earnings per share (EPS) of $0.63, lacking the consensus estimate of $0.71. However then, the corporate’s income was nonetheless barely increased than anticipated, coming in at $36.4 billion in comparison with the forecasted $36 billion. Because of this, Walgreens adjusted its projected full-year EPS to $2.80 to $2.95, down from the earlier estimate of $3.20 to $3.35.

This disappointing earnings report and lowered steerage led Walgreens to be the worst performer within the S&P 500 on June 27, dropping almost $3 billion in market capitalization and down over 53 p.c year-to-date.

In response to those headwinds, Wentworth revealed that Walgreens would shutter a quarter of its non-profitable stores, however the actual variety of closures is but to be decided. Walgreens at present has roughly 8,600 areas in america.

Wentworth additionally said that Walgreens is contemplating shutting down shops close to different better-performing shops to serve shoppers extra effectively with fewer areas in particular areas whereas evaluating shops going through points resembling theft.

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Furthermore, Wentworth disclosed that Walgreens will scale back its stake within the primary-care supplier VillageMD. Walgreens will even scale back the variety of manufacturers it gives to give attention to girls’s well being and strengthen its loyalty program. Nevertheless, it should retain different enterprise models, together with the abroad pharmacy chain Boots and Shields Well being Options, a specialty pharmacy agency.

“We acknowledge the place we’re is a turnaround,” Wentworth stated. “We acknowledge that we should be centered on what are the elements of the enterprise that we imagine are contributing and have a future, and a few of these want to vary.”

Fortuitously, Wentworth reassured staff and the market that the discount in U.S. retail operations wouldn’t lead to substantial job losses, as the corporate intends to reassign workers to different roles inside its remaining operations.

“We view this as a discount in our footprint, not a discount in our workforce,” he stated.

Walgreens affected by declining demand for COVID-related items and companies

James Kehoe, the manager vp and world chief monetary officer of Walgreens Boots Alliance, earlier introduced a sequence of cost-cutting measures. These cost-cutting measures embrace closing 150 Walgreens locations in the U.S. and 300 extra in the UK by the top of August 2024 as the corporate grapples with declining demand for companies associated to Wuhan coronavirus (COVID-19) and different financial pressures. (Associated: Rite Aid to CLOSE 27 more stores due to ongoing bankruptcy proceedings.)

Plummeting demand for COVID-related items and companies resembling vaccinations and testing critically impacted the corporate. Former CEO Rosalind Gates Brewer, Wentworth’s predecessor, reported an 83 p.c decline in vaccinations earlier than stepping down final yr.

“We had known as out COVID as a wildcard heading into the quarter and have sadly seen much less affected person willingness to vaccinate,” she stated on the time.

Be taught extra in regards to the fragile state of the American financial system at EconomicRiot.com.

Watch this clip from the “Worldview Report” discussing how bankruptcies in company America are once again on the rise after a two-year lull.

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