National drugstore giant Walgreens will close about 1,200 stores over the next three years as it seeks to stem $3 billion in quarterly losses across all its businesses due to the weak U.S. economy.
The company expects to close about 500 stores this fiscal year, which should immediately support adjusted earnings and free cash flow, the Associated Press reported. report.
Walgreens did not say where the store closures would take place.
According to Reuters, the company's shares jumped 5.4% to $9.50 in pre-market trading on the news. report.
“At first glance, (the forecast) looks better than the worst-case scenario,” said Michael Cherney, an analyst at Leerink Partners, adding that Walgreens continues to be plagued by unabated macro challenges this quarter. He added that it has been done.
As a result of recent headwinds, Walgreens stock has been trading near 30-year lows this year, down 65% this year, making it the worst-performing company in the S&P 500 index.
New CEO Tim Wentworth has unveiled a series of changes since taking over last year, including the firing of several mid-level executives and a $1 billion cost-cutting program.
“While this turnaround will take time, we are confident that the long-term benefits will be significant both economically and for consumers,” Wentworth said in a statement.
The closures were announced in June, but the company did not say at the time how many stores were affected.
The Deerfield, Illinois-based company had more than 8,000 stores in the United States as of August 31 of last year.
