Shares of Walgreens Boots Alliance (NASDAQ:) fell 10% in premarket trading Thursday after the retail pharmacy chain reported worse-than-expected third-quarter earnings and cut its full-year guidance.
The company reported third-quarter earnings per share (EPS) of $0.63, below the consensus estimate of $0.71. Revenue was $36.4 billion, slightly above estimates of $36 billion.
Looking ahead, Walgreens now forecast full-year adjusted earnings per share of $2.80 to $2.95, up from its previous forecast of $3.20 to $3.35, reflecting headwinds in the pharmaceutical industry and a worsening U.S. consumer environment .
The company also plans to close a significant number of underperforming stores and scale back its ambitious entry into the primary care market.
CEO Tim Wentworth told the Wall Street Journal that Walgreens will close a significant portion of its roughly 8,600 U.S. stores. While the final number of closures has not yet been determined, the company is reviewing about a quarter of its unprofitable properties and could close a “significant percentage” of them over the next few years.
Wentworth also mentioned that Walgreens will reduce its stake in primary care provider VillageMD and will no longer be a majority owner. However, Walgreens will retain some of its divisions and has no current plans to sell its overseas pharmacy chain Boots or specialty pharmacy firm Shields Health Solutions.
Wentworth said the company plans to reassign employees so the reduction in U.S. retail presence will not result in significant job losses.