Walgreens Boots Alliance mentioned on Tuesday it could shut 1,200 shops over the subsequent three years as new CEO Tim Wentworth plots a turnaround on the struggling pharmacy chain operator hit by sluggish client spending and low drug reimbursement charges.
The corporate additionally narrowly beat Wall Avenue’s lowered estimates for fourth-quarter adjusted revenue, and forecast fiscal-year earnings that had been principally according to expectations. Its shares jumped 5.4% to $9.50 in premarket buying and selling.
“At first blush, (the forecast) appears to be like higher than worst-case situation,” mentioned Leerink Companions analyst Michael Cherny, including that Walgreens continues to be buffeted by macro challenges that didn’t abate within the quarter.
Pharmacy chains are going through a number of challenges as customers keep away from high-priced grocery gadgets and pressures mount on funds they obtain from drug middlemen for filling prescriptions.
Because of this, Walgreens’ inventory is buying and selling close to 30-year lows and down 65% this yr, making it the worst performer on the S&P 500 index.
CEO Wentworth has unveiled a collection of adjustments since taking over the highest job final yr, together with the removing of a number of mid-level executives and a $1bn cost-cutting program.
“This turnaround will take time, however we’re assured it’ll yield vital monetary and client advantages over the long run,” mentioned Wentworth in a press release.
The closures had been introduced in June however the firm had not disclosed the variety of affected shops at the moment. It had over 8,000 shops in the US as of 31 August final yr.
Supply hyperlink
