Walgreens has announced the company will be shutting down over a hundred of its retail stores across the United States after failing to reach revenue goals for the third fiscal quarter. Walgreens hopes to cut operational costs by at least $800 million next year.
One hundred and fifty stores are scheduled to close as part of a cost-cutting measure after Walgreens stock fell short of its forecasted $4.45 to $4.65 per share to about $4.00 per share, as reported by NBC Chicago earlier this week.
The lowest-earning stores are slated to close, with some only reporting an average of $1.00 or slightly more per share.
Walgreens’ CEO Rosalind Brewer said the company will readjust and “take an appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year.” Walgreens is planning on increasing its current $3.5 billion cost management program to $4.1 billion.
A number of factors contributed to Walgreens’ financial struggles, including fewer people purchasing COVID-19 tests and vaccines. While Walgreens is more than just a pharmacy, selling retail items and groceries as well, the company makes most of its money from its pharmacy department and over-the-counter medications, averaging about 74 percent.
However, the company did exceed forecasted revenue expectations, ending the third quarter with $35.42 billion as outlined in Walgreens Boots Alliance’s third-quarter fiscal report. Unfortunately, that only netted Walgreens $118 million in profit, down 59 percent from the previous quarter.
The company has yet to release a list of which locations will be shut down. Walgreens has confirmed that the 150 stores will be closing their doors by August 2024. An additional 300 Boots stores, owned by the same parent company, will also be closing in the UK.