Walgreens slashes full-year outlook, announces significant store closures

Pharmacy chain Walgreens announced Thursday that it would close a significant number of its U.S. stores, after cutting its full-year profit outlook.

While the company did not disclose how many stores it plans to close, it said it will close many underperforming stores across the country to optimize operations. The closures will also focus on stores too close to other Walgreens stores or those struggling with theft.

Walgreens currently has more than 8,700 stores, with the closures focusing on one-quarter of its U.S. locations.

“Many of these actions will take time, but I am confident that we have the right team and the right strategy to lead a business turnaround for the Walgreens that our customers and patients need,” Walgreens CEO Tim Wentworth said in a statement about the closures.

Walgreens is the latest pharmacy chain to close locations over economic conditions. Walgreens competitors Rite Aid and CVS Pharmacy have closed dozens of locations since the start of the year.

The closures follow Walgreens’ decision to cut its full-year profit outlook this week, dropping its $3.20 profit per share estimate from March down to $2.80 per share.

Walgreens and other retail pharmacies have struggled in the years after the pandemic to recoup retail sales. According to the company’s numbers, Walgreens saw a 4% decrease in retail sales in the second quarter even after slashing prices for more than 1,000 items.

Pharmacy sales have also not been particularly reassuring for the chain which has seen a decrease in foot traffic since the pandemic, when customers sought out more prescriptions and COVID-related products.