(AP) – Walgreens shares tumbled early Thursday after the drugstore chain signaled that more store closings are on the way, missed earnings expectations for its third quarter and cut its annual forecast.
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The company said it was finishing a multiyear plan to shutter some underperforming U.S. stores, but it didn’t detail how many were targeted.
Walgreens and major competitors like CVS and Rite Aid — which is going through a bankruptcy reorganization — have already closed hundreds of stores over the past few years. The companies have dealt with challenges that include years of tight reimbursement for their prescriptions and rising costs for running their locations.
Plus, analysts say they’ve also been hit by growing competition from Walmart, Amazon and other discount retailers over sales of goods sold outside their store pharmacies. Consumers also tend to grow more price conscious when inflation rises.
Walgreens also has been closing VillageMD primary care clinics it had been installing next to its stores in order to grow its presence as a health care provider.
Chief Executive Tim Wentworth said in a statement that the company continues to face challenges that include “persistent pressure on the U.S. consumer.” Wentworth, who joined the company last fall, has been conducting a review of its business.
Walgreens Boots Alliance Inc. runs about 12,500 drugstores worldwide, including more than 8,600 locations in the United States.
The company said it earned $344 million in its fiscal third quarter, with adjusted results totaling 63 cents per share. Revenue rose nearly 3% to $36.35 billion.
Analysts were looking for earnings of 68 cents per share on $35.9 billion in revenue, according to FactSet.
Walgreens also said it now expects adjusted earnings to range from $2.80 to $2.95 for its fiscal year, which ends in August. That’s down from a forecast of $3.20 to $3.35 per share that it had narrowed in March.
Analysts expect $3.20 per share.
That guidance cut was not “overly shocking to us as the company now begins the next leg of its turnaround,” Leerink Partners analyst Michael Cherny said in a research note.
But the overall results surprised investors. Shares of the Deerfield, Illinois, company sank nearly 16% to $13.20 in premarket trading.
I haven’t had a good experience in a Walgreens since 2019. Their employees have a tortured look on their face – I use the plural because I’ve been to multiple locations, but most of the locations only had one. Their shelves are stocked poorly due to shoplifting, and what merchandise they do have is in a glass case, where customers must ask the Employee to unlock it, and of course they have to wait several hours. Don’t blame the long-suffering Employee – after all, he or she is responsible for filling store pickup orders, serving as cashier, dealing with unruly customers, ignoring shoplifters, and printing photos.
Walgreens is not only dying, they are refusing hospice care.
Not possible they are losing money. Bidenomics is working. Anyone who tells you different is lying.
As long as black democrat operatives, Letitia James and Alvin Bragg continue to allow black thugs to steal up to $999.00 from the drugstore of their choosing, these stores will continue to close.
All this boils down to 2 words:-
1) bragg
2) democRATS
Poorly run store poorly trained staff
They deserve to fail
Walgreens was a great company. Then they sold to European company to save USA taxes. That was the beginning of the end. They cannot even fill a simple prescription pharmacies closed due to staff shortage where I live. On line services are horrible. They saved taxes to have the company ultimately fold. And I am sure the ceo genius that made the descision got a huge golden parachute. I transferred all my rx to cvs which does an excellent job wherever I go to them throughout the USA
I have no sympathy for Walgreens. Several years ago, CVS completely eliminated the sale of all tobacco products in its stores. Walgreens, being greedy, refuses to eliminate the sale of tobacco products from its shelves. It is hypocritical, since its pharmacies sell products to end smoker’s addiction to tobacco. Hence, it wants to make money from customers on both sides of the coin. The largest grocery chain in the USA, Kroger, does the exact same thing.