Walgreens CEO: Turnaround Will Take Time

For Walgreens Boots Alliance CEO Tim Wentworththe company’s turnaround process is not a sprint but a marathon.

“We still have a lot of work to do here,” he told analysts in the company’s first quarter earnings call on Friday (Jan. 10). “While our transformation will take time, our early growth reinforces our belief in a sustainable, retail pharmacy-led operating model. Our focus is our balance sheet. The continued operating cash flow is front and center, and it’s a multi-year process to consistently and reliably deliver that. But we’re executing with urgency.”

While company officials look to strengthen the retail pharmacy, optimize the store footprint and address reimbursement models, elevating the customer experience continues, Wentworth said on the call.

“A lot of things are underway inside our store front initiatives, it’s more about coming up with the right number of stores that we can invest in properly,” he said. “We are happy about the truth we changed our team in terms of analytics, omnichannel and digital experiences, together with our merchandising team. We also continue to work around customer loyalty and as a health and wellness provider Granted meet the customer where they are with the things they are Granted want from us.”

Wentworth focuses on digital and virtual check-in for pharmacy patients soon to launch in 100 stores, adding virtual care offered today in 30 states.

“They don’t have to stand in line and can shop at the store while they wait,” he said.

“We also employ some concierges at the front of the store to help customers,” he added. “We are also working on our own brand merchandise. We want to be a reliable provider of owned brand merchandise, introducing 60 owned brands in the first quarter.

The company started with it turnaround strategy last year after considering closing a quarter of its stores in early summer. In December, media reports spread about Walgreens thinking of a deal with BE sold to a private equity firm, but those reports have not been confirmed or denied.

By the Numbers

On the financial side of its Q1 earnings, Walgreens reported Q1 sales of $39.5 billion, a 7.5% increase from last yearhowever It posted a net loss of $265 million, up from a loss of $67 million last year due to higher operating losses. The US retail pharmacy segment rose 6.6%, driven by a 10.4% increase in pharmacy sales, while retail sales fell 6.2% due to a weaker flu season and reduced discretionary spending. The international segment grew 10.2%, supported by a favorable currency effect of 3.6%.

Despite the mixed results, company officials are pressing ahead their focus of restructuring, including plans to close approximately 500 stores during fiscal year 2025.

“We closed about 70 in the first quarter and are on track for another 450 this year,” Wentworth said during the call. “We have retained most of our pharmacy team members. A smaller footprint would be healthier for our company. “

Looking forward, Walgreens pointed to build a sustainable, long-term strategy, where operational efficiency and customer loyalty play critical roles, Wentworth said. The company has changed how it manages pharmacy services, with an emphasis on better reimbursement models and risk management, ensuring it paid for the value it provides.

In addition, Walgreens EXERCISES data and analytics to improve decision making, streamlining its operations while delivering a better customer experience. These efforts will continue to evolve as part of a multiyear process that reinforces Walgreens’ commitment to becoming a more customer-driven and health-focused brand.he said.

“We’re executing against long-term priorities,” Wentworth said during the call. “We are happy with our results in the first quarter, but there is a lot of work to do NEED dO. We remain committed to a renaissance led by retail pharmacy, but change will take time.