Oct. 15 (UPI) — Walgreens on Tuesday reported growth within its business segments, but said it will shutter more than 1,000 stores over the next few years following June’s announcement it would close “underperforming” U.S. stores.
Walgreens announced that it will close roughly 1,200 of its stores through 2027. The company looks to close at least 500 stores by next year alone.
Of roughly 8,700 U.S. store locations, Walgreens said a quarter of them are unprofitable.
Walgreens shares jumped 12% as of just before noon and new information released by Walgreens on Tuesday reflected “sales growth across all segments,” according to a company release.
Walgreens CEO Tim Wentworth said during an earnings call that the closures will give the company a “healthier store base” and “will enable us to respond to shifts in consumer behavior and buying preferences.”
Wentworth added that Walgreens hopes to keep on a majority of its workforce impacted by the pending store closures but for now how many will lose jobs or otherwise be impacted is not entirely clear.
Walgreens is estimated revenue for the year to be somewhere between $147 billion and $151 billion. Meanwhile, Wall Street analysts estimated roughly $147.3 billion.
In its statement Tuesday, Wentworth said FY 2025 “will be an important rebasing year as we advance our strategy to drive value creation.”
“This turnaround will take time,” he said. “But we are confident it will yield significant financial and consumer benefits over the long term.”
For fiscal 2024 sales, Walgreens saw a 6.2% bump to $147.7 billion, which company officials say is up 5.7% on a constant currency basis.
The company met or slightly outpaced Wall Street estimates in some business sectors but reported a net $3 billion loss. And in the 2024 fourth-quarter, reported its loss per share was $3.48 versus a loss per share of 21 cents in the year-ago quarter.
But fourth-quarter sales increased 6% year-over-year to $37.5 billion, which Walgreens said is up 6.1% on a constant currency basis.
This appears to be the follow-up to Wentworth’s revelation in June that Walgreens had plans to close a “significant portion” of its “underperforming” 8,500 U.S. stores.
But this arrives during a rocky year for the retail chain still seeing highs and lows.
Walgreens recently agreed to pay a $106.8M fine for alleged fraudulent federal billing.
The company, however, reported $28.5 billion in revenue during the second quarter of FY2024, which was up slightly over the same period last year but still below expectations.
However, Walgreens has made efforts over recent months to put itself in a better financial position.
June’s announcement slashed 10% of Walgreens employees at its Chicago corporate offices after it was forced to pay nearly $6 billion to settle opioid lawsuits with several states.
Following its numerous legal battles, the company reported earnings per share were down 20.3% for the second quarter of fiscal year 2023.
