Retailer closures have actually subsided for the reason that peak of the COVID pandemic, however the retail apocalypse is much from over. Main corporations like Sears are on the precipice, closing their final shops in a number of states, whereas large names like Mattress Tub & Past are going out of enterprise. However even when they don’t seem to be shutting down fully, many retailers are nonetheless considerably paring down their bodily presence. Now, Walgreens has introduced plans to shut 450 places, regardless of elevated gross sales. Learn on to be taught extra concerning the drugstore chain’s new plans.
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On June 27, Walgreens Boots Alliance reported its third-quarter earnings for the 2023 fiscal yr—and at first look, issues look fairly good.
In response to the report, the retailer’s third-quarter gross sales reached $35.4 billion this yr, which is a rise of 8.6 % from the yr prior. Wanting on the fiscal yr total, Walgreens’ gross sales within the first 9 months elevated by 3.4 % from the identical interval within the final fiscal yr, reaching $103.7 billion in whole.
The corporate’s U.S. retail and pharmacy sectors have been doing notably properly. Nationwide, comparable pharmacy gross sales elevated 9.8 % in comparison with the third quarter in fiscal yr 2022, and comparable retail gross sales went up by 0.2 %, “led by robust leads to the grocery & family and sweetness classes,” Walgreens Boots Alliance mentioned in its report.
Nevertheless it’s not all excellent news for Walgreens.
Regardless of the rise in gross sales, Walgreens fell wanting its estimates for the third quarter of fiscal yr 2023. The corporate additionally lower its full-year earnings outlook, “reflecting difficult shopper and macroeconomic situations, and decrease COVID-19 vaccine and testing volumes.”
Consequently, Walgreens’ shares fell by 9 % to $28.64—which is the bottom they have been in additional than 11 years, Reuters reported.
“Shoppers proceed to understand the worth, comfort, and vary of providers supplied by Walgreens and Boots. Nonetheless, considerably decrease demand for COVID-related providers, a extra cautious and value-driven shopper, and a just lately weaker respiratory season created margin pressures within the quarter,” Walgreens CEO Rosalind Brewer mentioned in a press release accompanying the corporate’s June 27 press launch. “Our revised steering takes an appropriately cautious ahead view in mild of shopper spending uncertainty, whereas nonetheless demonstrating clear drivers of a return to working progress subsequent fiscal yr.”
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With uncertainty brewing and a much less rosy monetary outlook, Walgreens has determined to make some critical cuts. The retailer has already been busy closing places over the previous yr, however on a June 27 earnings name with traders, CFO James Kehoe revealed that Walgreens is planning to shut one other 450 shops.
“We’ll proceed to optimize our places and opening hours, and anticipate to shut a further 300 places within the U.Okay. and 150 places within the U.S.,” Kehoe mentioned through the name.
Finest Life reached out to Walgreens concerning the upcoming closures, and we’ll replace this story with their response.
Walgreens has not shared far more details about these closures—like precisely which shops will likely be affected, or when the closures will start.
However a spokesperson for the corporate advised CNN that the retailer plans to shut the 150 U.S. places by the top of its subsequent fiscal yr, which falls on Aug. 31, 2024. There are at present round 9,000 Walgreens shops within the U.S., per CNN.
“As you might have seen, we’re accelerating our portfolio optimization to additional simplify the enterprise,” Kehoe mentioned.