Grapevine

Walgreens says it will close 1,200 stores by 2027, as earnings top estimates

Walgreens on Tuesday reported fiscal fourth-quarter sales and adjusted profit that beat Wall Street's expectations, as the company slashes costs in an attempt to steer itself out of a rough spot.

The retail drugstore chain also said it plans to close roughly 1,200 stores over the next three years, which includes 500 in fiscal 2025 alone. The company said those closures will be "immediately accretive" to its adjusted earnings and free cash flow.

Walgreens has around 8,700 locations in the U.S., a quarter of which it says are unprofitable.

Those closures will give Walgreens a "healthier store base" and "will enable us to respond to shifts in consumer behavior and buying preferences," the company's CEO Tim Wentworth said during an earnings call on Tuesday. He added that Walgreens aims to employ the majority of the workforce affected by the closures, though it is unclear how many employees stand to lose their jobs.

The results cap a rocky fiscal 2024 for Walgreens, which is grappling with pharmacy reimbursement pressure, softer consumer spending and challenges related to its push into primary care, among other issues. The company on Tuesday said it surpassed its target of cutting $1 billion in costs during fiscal 2024, which included shuttering underperforming stores, laying off employees and using artificial intelligence to make its supply chain more efficient, among other efforts.