Walgreens plans to close more stores in coming years

Walgreens is finalizing a plan to address its store underperformance, with the potential closure of hundreds of additional U.S. stores over the next three years.

CEO Tim Wentworth told analysts Thursday that about 25% of the company’s stores were underperforming and could face imminent changes. The company currently operates more than 8,600 stores in the United States.

The big picture: The plan could involve closing a significant portion of the roughly 2,100 underperforming stores if they don’t improve. Additionally, the company has already closed 2,000 locations over the past decade.

• Walgreens and other major competitors such as CVS and Rite Aid have adapted to market challenges, including strict prescription reimbursement, rising operational costs and increased competition from retailers such as Walmart and Amazon.
• Consumers have become more price conscious, leading to increased competition for sales of non-pharmaceutical items.

Go further: Walgreens also reevaluated its strategy for VillageMD primary care clinics, canceling previous expansion plans and closing about 160 clinics.

• The company aims to keep these clinics profitable and is focused on growing other areas of its business, such as specialty pharmacy.
• Walgreens reported a third-quarter profit miss and lowered its full-year forecast, calling for adjusted earnings of $2.80 to $2.95 per share for the year, down from a previous range of $3.20 to $3.35 per share.