Walgreens plans to close a significant number of stores as part of its economic recovery.
The company announced that it would close a “significant” number of its 8,600 stores nationwide, perhaps as many as 25% of those locations, although Walgreens has not yet made a final decision on that number.
The timing of the closure is somewhat unclear at the moment. the wall street journal reported that the closures would take place in the next few yearsbut CNBC’s Bertha Coombs reported that could happen in the coming quarters.
Nearly a quarter of all Walgreens stores are not profitable, the company said. Many of them are in urban areas. The company said workers at the affected stores would be offered positions at other locations and that it did not expect the closures to have an impact on employee numbers.
“We continue to face a challenging operating environment, including ongoing pressures on the U.S. consumer and the impact of recent market dynamics that have eroded pharmacy margins,” CEO Tim Wentworth said in a statement. “Our results and outlook reflect these headwinds, despite strong performance in our international and U.S. healthcare segments… We are addressing critical issues with urgency and working to unlock growth opportunities. Many of these actions will take time.”
Walgreens The stock was hammered Thursday following that news, as well as third-quarter earnings falling short of analysts’ expectations and the company’s reduction of its full-year earnings outlook, calling the “difficult” environment for pharmacies. Earnings per share came in at 63 cents, compared to 68 cents expected.
Walgreens is a staple in many cities, but it has recently come under pressure from online pharmacies run by entities ranging from Amazon to Mark Cuban. Staffing shortages have also proven to be a challenge for the chain.
This story was originally featured on Fortune.com
