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Walgreens announced plans to potentially close hundreds more stores over the next three years to stabilize its operations, AP News reported.

This is after the pharmacy giant's latest fiscal quarter results fell short of expectations. Earnings totaled 63 cents per share on revenue of $36.35 billion, slightly up by 3%. CEO Tim Wentworth stated that about 25% of their current 8,600 U.S. stores are underperforming, necessitating imminent changes to their business model.

Why Walgreens Declined in Profits

The company's struggles are compounded by intensified competition from retail giants like Walmart and Amazon, alongside ongoing pressures from tight prescription reimbursements and escalating operational costs.

Alongside Walgreens are rivals like CVS and Rite Aid, who have also been forced to shut down numerous locations in recent years due to similar challenges and increased price sensitivity.

Despite these setbacks, Walgreens remains optimistic about its future, albeit with revised annual earnings forecasts now ranging between $2.80 to $2.95 per share, down from earlier projections.

While analysts noted the predictable nature of these adjustments, they expressed surprise at the latest figures, leading to a massive drop in Walgreens' stock price by 21% in premarket trading, reflecting investor concerns over the company's path forward.

Per VCPost, Walgreens' plans to open a new pharmacy for cell and gene therapies are ongoing.