Walgreens Boots Alliance recorded a $5.8 billion impairment charge on its investment in clinic operator VillageMD, as part of a cost-cutting initiative to close over 160 unprofitable sites.
VillageMD’s plan focuses on densely populated areas to increase patient numbers per doctor, but slower growth rates prompted a downward revision of long-term forecasts by Walgreens executives.
CEO’s Cost-Cutting Focus
New CEO Tim Wentworth emphasizes cost reduction to revive Walgreens’ sagging share price post-pandemic.
The company’s shift towards integrating clinics into traditional drugstores reflects a broader strategy aimed at aligning businesses for long-term savings and strategic coherence.
Despite a net loss of $5.9 billion for the quarter that ended on February 29th due to the impairment charge, earnings per share excluding one-time items surpassed analyst estimates, indicating potential resilience amidst challenges.
