Posted on 06/29/2023 11:09:36 AM PDT by Angelino97
Walgreens is set to shutter 150 stores after slashing its earnings forecast due to lessening demand for Covid-19 tests and vaccine shots.
Shares in the pharmaceutical chain plummeted to $28.64 on Tuesday - their lowest level in more than 11 years - prompting drastic cost-cutting measures from executives.
Last night the firm confirmed all the closures will take place by the end of August 2024. As of midday Thursday its shares were sitting at $28.59, down 30 percent from last year.
Walgreens said it had been hit especially hard by the end of the pandemic which saw demand for its Covid-19 vaccine shots and testing facilities decline rapidly.
It also suggested that consumers were increasingly inflation-weary and less likely to spend.
Walgreens CEO Rosalind Brewer - who was given a $24.7 million signing bonus when she took on the job in February 2021 - told investors in a conference call: 'We have seen changing market trends that have consumers prioritizing value in response to a more uncertain and challenging economic environment.'
The chain reported a 59 percent profits decline to $118 million in the fiscal third quarter, which ended May 31, reports NBC Bay Area...
The news prompted shares in its rivals CVS Health and Riteaid to also fall.
On Thursday CVS health shares were trading at $68.34, down by 26.78 percent in the last year.
Similarly, Riteaid stocks were trading at $1.54, down by 78 percent over the last year.
Investment expert Jeff Jonas, who manages the Gabelli Funds portfolio, told Reuters: 'Very few people are getting either rapid tests or the actual PCR nasal swab tests. That ... probably has some impact on CVS and Rite Aid.'
(Excerpt) Read more at dailymail.co.uk ...
“sales have been hit by plummeting demand for Covid vaccines and tests”
Gee, maybe don’t base your long term market strategy on a seasonal virus.
CVS is with Target which helps them and there’s Walmart, grocery and mail order pharmacies to compete with.
Here in ATL there’s lots of decaying former Walgreens, so many I almost assumed they went out of business. Interestingly I haven’t seen one of those buildings become something else. Maybe the areas they were in weren’t the best?
Around Tennessee, it feels as if there are 150 Walgreens in the same city sometimes.
Burned out rubble of liberal drug-den murder capital easy-on-crime cities hardest hit.
It’s a nonsense excuse I think. They have other problems they don’t want to mention.
For example, competition is one. Years ago, in Chicago, you had 2 options for drugstores: Walgreens and Osco, and Oscos were only add-ons to Jewel supermarkets. So Walgreens had no stand-alone competition. And Jewel closed most (maybe all) of the Oscos a while back.
But now CVS and I’m sure a few others have entered the market and Walgreens has real competition.
Then there is the retail theft epidemic they don’t want to talk about. And the sales hits they are taking from online shopping, and even online prescription services.
But why tell your investors your business is dying for reasons nobody can control, when you can just say “COVID!”
Our Walgreens will now be a Citibank.
If only that had been foreseeable. It caught them completely by surprise. They obviously need to pay more for VPs of Marketing and the CEO to avoid such nasty surprises in the future. I hear there is a VP of Marketing at Bud Light that is looking for a new position and challenges.
Their sister company, Boots (UK), are shuttering many high street locations as well. I liked Boots...but was rather expensive.
Call it what it is...The Bidenpocalypse !!!
Hold on to your hats folks, it’s gonna get bumpy.
I just bought Walgreen Boots yesterday! Like CVS, WBA has been a dog of late. (I usually avoid stocks on the New Lows list, but the yield is too tempting.)
7 times (reduced) earnings, 6.75% dividend, a great 30% investment in Amerisource Bergen, and the store reductions will stabilize margins. Brewer had a strong reputation running Sam’s Club, so I hope she can work some magic here.
Most will be dollar stores, until there is one on every corner.
Walgreens got greedy and staked their future on the Chinese flu. A store near me converted half the place into a walk-in medical clinic. They now have half the inventory to sell they previously had.
“If the business and market thinks they were to be on going, then they are idiots.”
Idiots abound. Nobody (or at least few) ever think that the record is going to stop and they’ll be left without a chair.
For example, during housing booms, as home prices rise it becomes profitable to build new homes to sell. But as the new homes hit the market, the difference between supply and demand gradually shrinks, and that inevitably will lead prices to drop below the level where new construction is profitable. And there is a 6 month lag from when you start new construction to get it to market. This means if you just keep building through the boom trying to get as much profit as possible, you will be left holding the bag with a bunch of new homes you cannot sell (or will have to sell at a discount and lose money on ).
Everyone in real estate knows these facts. And yet, every time there is a housing boom, builders keep building until they oversaturate the market and are left holding that bag. Every damn time.
There's also Amazon Pharmacy. Amazon is into everything.
Let’s be honest. They were “dollar stores” in the 1980s. Today they are 5 or 10 buck stores, if they were being honest.
Corporate greed knows no bounds.
High crime area citizens will hop in their stolen cars and shop in suburban areas. Suburban Moms voted for it.
That doesn't make sense to me. What percentage of their overall sales was dependent on Covid? How did the chain manage to grow so rapidly in the years prior to the pandemic?
“Those stores were open BEFORE Covid. They couldn’t just scale to what they were?”
My thoughts too.
Stores were built prior to covid so why are they unprofitable now?
It isn’t because of COVID - more likely it’s due to the issue all other retailers are having in metro areas - shoplifting.
So, just using Covid as an excuse.....again.
Also, a DIE excuse not to keep struggling ghetto stores open.
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