(Reuters) – Walgreens Boots Alliance on Thursday cut its profit forecast for fiscal 2024 and said it would close more underperforming U.S. stores as weak consumer spending hurts its retail operations.
Shares of the Illinois-based company fell more than 15% in premarket trading, after falling 40% for the year so far.
Without specifying the number of closures, the drugstore chain said it was finalizing a “significant multi-year” program to close some of its more than 8,700 stores and that its review was focused on a quarter of its U.S. locations.
Walgreens could close a “significant percentage” of the stores it examined over the next few years, CEO Tim Wentworth said in an interview with The Wall Street Journal.
The company did not immediately respond to a Reuters request for comment on details of the store closures.
Investors are counting on Wentworth, who joined the team last October, to drive strategy and cost-cutting efforts at Walgreens as the pharmacy operator grapples with declining demand in its pharmacy operations. retail due to reduced spending by inflation-weary consumers and weak COVID product sales. .
Walgreens also aims to simplify its healthcare portfolio in the country, which includes primary care provider VillageMD.
Wentworth told the WSJ that the company will no longer be the majority owner of VillageMD.
As of February 2024, Walgreens had closed 484 stores in the United Kingdom and 625 stores in the United States, according to a regulatory filing.
The company now expects adjusted earnings of $2.80 to $2.95 per share for its fiscal year ending in August, up from $3.20 to $3.35 per share forecast in March.
Analysts on average expect annual earnings of $3.20 per share, according to LSEG data.
On an adjusted basis, the company reported third-quarter earnings of 63 cents per share, compared with an estimate of 68 cents.
(Reporting by Bhanvi Satija, Christy Santhosh and Sneha SK in Bengaluru; editing by Devika Syamnath)
