The retail and pharmacy chain has struggled in recent years as shopping preferences have changed and consumers have moved to buy more products online. Walgreens previously embarked on a cost-cutting plan largely targeting the retail pharmacy business.
Walgreens announced the three-year plan for store closures alongside its earnings Tuesday morning, with the company noting that about 500 of the closures are expected in fiscal year 2025, which just began.
The company expects the move will prove immediately accretive to adjusted earnings per share and free cash flow.
After a deeply disappointing report three months back that brought a guidance cut and ushered in a 22% one-day stock decline, Walgreens’ latest results are getting a better reception on Wall Street. Shares are up 5% in premarket action Tuesday as Walgreens cleared the consensus view on both revenue and earnings.
The results “reflected our disciplined execution on cost management, working capital initiatives and capex reduction,” Chief Executive Tim Wentworth said in a release.
Walgreens’ revenue rose 6% to $37.5 billion, while analysts were looking for $35.8 billion.
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