Walgreens to Close 1,200 Stores, 14% of U.S. Total, Shares Rise Despite Opioid Loss

Oct 15, 2024, 01:25 PM

Walgreens Boots Alliance announced plans to close approximately 1,200 stores, about 14% of its 8,700 U.S. locations, over the next three years as part of a cost-cutting strategy to turn around its struggling U.S. business. This includes 500 closures slated for fiscal year 2025. The company noted that one in four of its stores are unprofitable and expects the closures to be "immediately accretive" to adjusted earnings per share and free cash flow. In its fiscal fourth quarter, Walgreens reported an adjusted earnings per share of $0.39, surpassing analysts' estimates of $0.36 but declining 41% year-over-year. Revenue for the quarter reached $37.55 billion, exceeding expectations and marking a 6% increase from the prior year. The company posted a net loss of $3.48 per share in the quarter, compared to a loss of $0.21 per share in the same period last year. The loss includes a non-cash charge related to opioid liabilities. Despite the net loss, Walgreens shares rose over 13% following the earnings announcement. CEO Tim Wentworth is leading the turnaround efforts amid challenges such as sluggish consumer spending and low drug reimbursement rates.