WASHINGTON, Oct 17 (Bernama-dpa) -- Walgreens, one of the largest drugstore chains in the United States, announced plans on Wednesday to close approximately 1,200 of its branches over the next three years.
The closures will affect 500 stores in the fiscal year 2025, it said, reported German news agency dpa.
The move, which was announced while reporting a significantly wider net loss in its fourth quarter, is expected to be immediately accretive to adjusted earnings per share and free cash flow.
The company also projects growth in its healthcare and international segments.
Walgreens said the expected store closures include around 300 stores that had been previously approved for closures under the Transformational Cost Management Programme.
In its fourth-quarter conference call, Tim Wentworth, chief executive officer, said the expanded footprint optimisation programme aims to reduce the fixed costs associated with these stores.
He added that the firm intends to follow its historic practice to redeploy the majority of the workforce from those stores that are being closed.
The company noted that of its over 8,000 stores, around 6,000 are profitable, and that it intends to invest in these stores over the next several years.
It said it is prioritising investment in the stores that will receive the scripts, merchandise, and foot traffic from those being closed.
Regarding the remaining underperforming stores, the company said it will continue to evaluate 800 stores and is focused on improving their operating performance and cash flows.
Wentworth said that in the fiscal year 2025, the company is focusing on stabilising the retail pharmacy by optimising footprint, controlling operating costs, improving cash flow, and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future.
Walgreens shares on Tuesday's regular trading gained around 16 per cent after its fourth quarter adjusted earnings and sales beat the market estimates.
Meanwhile, the stock is trading down around 1 per cent in Wednesday's pre-market activity on the Nasdaq.
--BERNAMA-dpa
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