Walgreens to Close 1,200 Stores After $3 Billion Loss

Deerfield, IL — Walgreens has announced plans to close approximately 1,200 stores over the next three years as part of a strategy to revitalize its struggling U.S. operations. This decision comes after a significant $3 billion loss in the last quarter, pushing the pharmacy giant to take significant steps toward recovery.

In an earnings report released Tuesday, Oct. 15, Walgreens indicated that about 500 of these closures will occur within the current fiscal year. However, the company has not disclosed the specific locations that will be affected.

Operating roughly 8,500 stores in the U.S. and a few thousand more internationally, Walgreens has acknowledged that about one in four U.S. locations are currently unprofitable. This move follows the company’s commitment, made in late June 2024, to finalize a turnaround plan that includes closing hundreds of underperforming stores.

The plan also encompasses the shuttering of 300 stores previously approved under a cost-cutting initiative. 

CEO Tim Wentworth described fiscal 2025, which started last month, as a critical “rebasing year” for the company. “This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” he stated.

Walgreens has faced mounting challenges recently, including tight reimbursement rates for prescription drugs and rising operational costs. The company is also contending with increased competition from online retailers like Amazon, as well as major chains such as Walmart and Target.

Rival CVS Health is wrapping up a three-year plan to close 900 stores, while Rite Aid recently emerged from bankruptcy after reducing its store count to around 1,300.

Despite the challenges, Walgreens shares rose over 4% in pre-market trading Tuesday, reflecting investor optimism following the company’s latest earnings report, which beat Wall Street’s expectations. However, Walgreens' stock remains near 30-year lows and has plummeted 65% this year, making it the worst-performing stock on the S&P 500 index.

Since taking over as CEO last year, Wentworth has implemented significant changes as part of its restructuring efforts, including removing several mid-level executives and a $1 billion cost-cutting program.