Walgreens to close 1,200 stores — number in Florida to be determined
By Wendell Hutson
Tampa Bay Business Journal
Published: Oct 16, 2024

Walgreens Boots Alliance Inc. said Tuesday it will close 1,200 U.S. retail stores, including 500 in fiscal 2025. The pharmacy giant has not yet determined which, if any, Florida stores will be among the closures.

The nationwide store closures will occur over the next three years as Walgreens (Nasdaq: WBA) aims to cut costs while consumer spending continues to slow.

Walgreens has approximately 8,500 stores nationally and more than 200 in Florida.

The Illinois-based pharmacy retailer said store closures are necessary to help improve cost management.

“Our retail pharmacy business is central to our go-forward business strategy. However, increased regulatory and reimbursement pressures are weighing on our ability to cover costs associated with rent, staffing and supply needs,” Walgreens said in a statement. “It is never an easy decision to close a store. We intend to redeploy team members from those stores that we close.”

The news accompanied Walgreens' fourth-quarter and fiscal-year earnings, which reported Q4 sales increased 6% from the year-ago quarter to $37.5 billion, reflecting sales growth across all segments. However, the company posted a Q4 operating loss of $978 million, up 117% compared with the year-ago quarter.

“In fiscal 2025, we are focusing on stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future,” said Walgreens CEO Tim Wentworth in a statement. “This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term.”

Edwards Jones Investments gave Walgreens a "hold" rating on Tuesday but said it expects the company to recover.

"We believe the company faces risks with a more challenging reimbursement environment," the report stated, referring to the money drugstores earn for dispensing prescriptions. "Competition from online retailers for everyday items and pharmacy services is an ongoing concern. However, Walgreens is doing an admirable job lowering its costs which will include unprofitable store closings the next few years, and we expect to see more health care services, mostly via its new U.S. Healthcare operations."

Some store closures were announced this summer by Wentworth, who said at the time Walgreens was facing “a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins.”