Drugstore chain Walgreens Boots Alliance will close 200 stores as part of a plan to cut $1.5 billion in expenses over the next three years.
Walgreens (WBA), which is still on the hunt for a new CEO after the exit of Greg Wasson late last year, also said it was still looking for a permanent successor.
“While we work through this process in a deliberate and methodical manner to fill such a critical role, we are making the necessary business decisions to move us forward,” said Executive Chairman Jim Skinner.
The store closures are part of a plan Walgreens first unveiled in August, when it said it was looking to cut costs, primarily in the company’s U.S. retail pharmacy division. Walgreens now sees an opportunity to trim $1.5 billion in expenses, $500 million more than what the company expected last summer. Walgreens operated 8,330 stores in the U.S., Puerto Rico and the U.S. Virgin Islands as of the end of November, so the store closures are fairly minimal.
Walgreens is closing some U.S. stores at a time when the company is reporting stronger results for its domestic retail pharmacy business. That division, which includes Walgreens and Duane Reade stores, posted second-quarter sales of $21 billion, up 7.4% from a year ago. Same-store sales climbed 6.9%. The business has benefited from a strong cough, cold and flue season, which helped increase prescriptions at Walgreens’ pharmacy counters. Overall, fiscal second-quarter adjusted earnings grew 22% to $1.18 per share while sales leapt 36% to $26.6 billion as Walgreens fully acquired Europe-based Alliance Boots.