Walgreens Loses Another $3 Billion And Plans To Close 1,200 Stores

On a time erstwhile Walgreens Boots Alliance reported different $3 cardinal successful losses, nan drugstore concatenation said it will adjacent 1,200 stores complete 3 years successful an effort to return to profitability and semipermanent growth.

The drugstore chain, which has been dogged for overmuch of this twelvemonth by myriad operating issues including sagging unit income and billions of dollars successful losses connected its VillageMD session investment, reported a nett nonaccomplishment of $3 billion, aliases $3.48 per share, successful its fiscal 4th fourth ended Aug. 31 compared to a nett nonaccomplishment of $180 million, aliases 21 cents a share, successful nan twelvemonth agone period.

In its quarterly net study released Tuesday morning, Walgreens said nan bottommost statement was “primarily driven by a higher operating loss, a $2.3 cardinal non-cash complaint for valuation allowance connected deferred taxation assets chiefly related to opioid liabilities recognized successful anterior periods, and a non-cash impairment complaint related to equity finance successful China.”

Still, Walgreens said net were successful statement pinch analysts’ expectations and nan shop closures would beryllium “immediately accretive to adjusted net per stock and free rate flow.” In fiscal 2025, Walgreens is projecting adjusted net per stock of $1.40 to $1.80.

Walgreens said nan 1,200 closures of nan 8,500 stores successful nan U.S. complete nan adjacent 3 years see 300 stores “previously approved” nether a institution “transformational costs guidance program.” Walgreens said astir 500 stores will adjacent successful its fiscal 2025, which began Sept. 1 of this year.

“Our financial results successful nan fiscal 4th fourth and afloat twelvemonth 2024 reflected our disciplined execution connected costs management, moving superior initiatives and capex reduction,” said Walgreens main executive serviceman Tim Wentworth, who took complete a twelvemonth agone from Roz Brewer.

Walgreens said 4th fourth income accrued 6% to $37.5 billion, “reflecting income maturation crossed each segments.” In particular, U.S. unit drugstore income were up 6.5% to $29.5 billion.

“In fiscal 2025, we are focusing connected stabilizing nan unit drugstore by optimizing our footprint, controlling operating costs, improving rate flow, and continuing to reside reimbursement models to support dispensing margins and sphere diligent entree for nan future,” Wentworth said successful a connection accompanying institution earnings. ““Fiscal 2025 will beryllium an important rebasing twelvemonth arsenic we beforehand our strategy to thrust worth creation. This turnaround will return time, but we are assured it will output important financial and user benefits complete nan agelong term.”

Walgreens invested much than $6 billion successful VillageMD nether erstwhile CEO Brewer to take a controlling stake, but nan institution has already scaled backmost dramatically connected nan description of expert practices and Village Medical clinics nan institution opened attached to Walgreens. The VillageMD finance hasn’t gone good and Walgreens executive said nan clinics weren’t attracting capable patients.

On Tuesday, Walgreens said its operating nonaccomplishment successful fiscal 2024 was $14.1 cardinal and nan nett nonaccomplishment for nan twelvemonth was $8.6 billion, aliases $10 a share. “(The) operating nonaccomplishment successful nan existent play reflects a $12.4 cardinal non-cash impairment complaint related to VillageMD goodwill, which resulted successful a $5.8 cardinal complaint attributable to WBA, nett of taxation and non-controlling interest,” Walgreens reported.

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