Walgreens to Close 1,200 Stores in Major Revamp

Walgreens has decided to shut down around 1,200 of its stores over the next three years. This move is part of the company's strategy to improve its struggling U.S. business. The first 500 closures are expected to happen this fiscal year and should positively impact the company's earnings and cash flow. Walgreens has been facing challenges such as lower prescription reimbursements and increased operating costs.

The company is also reconsidering its plan to open primary care clinics near some of its stores, a strategy that was pushed under former CEO Rosalind Brewer. In August, Walgreens announced it might sell part or all of its VillageMD clinic business, just two years after announcing a massive expansion. Earlier this year, Walgreens cut its dividend for shareholders to free up more cash for business growth. Despite these changes, the company's stock has seen a significant drop, losing almost two-thirds of its value so far in 2024. However, the stock saw a boost on Tuesday morning following the cost-cutting announcement.

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