Walgreens plans to close a large number of stores as part of a restructuring.
The company has announced it will close a “significant” number of its 8,600 stores nationwide, perhaps as many as 25% of those locations, although Walgreens has not yet made a final decision on the number.
The timing of the shutdown is still somewhat vague at the moment. Wall Street Journal reported that the closures would happen in the coming years, but CNBC’s Bertha Coombs reported that they could happen in the coming quarters.
Nearly a quarter of all Walgreens stores are unprofitable, the company said. Many of these are in urban areas. The company noted that employees at the affected stores would be offered positions at other locations and that it did not expect the closures to impact employee numbers.
“We continue to face a difficult operating environment, including continued pressure on the U.S. consumer and the impact of recent market dynamics that have eroded pharmacy margins,” CEO Tim Wentworth said in a statement. “Our results and outlook reflect these headwinds, despite solid performance in both our international and U.S. healthcare segments… We are addressing critical issues with urgency and working to unlock growth opportunities. Many of these actions will take time.”
Walgreens shares were hit hard Thursday after the news, as well as third-quarter earnings that fell short of analysts’ expectations and the company lowering its full-year profit forecast, calling the environment for pharmacies “challenging.” EPS came in at 63 cents, compared with expectations of 68 cents.
Walgreens is a staple in many cities, but has recently come under pressure from online pharmacies run by entities ranging from Amazon to Mark Cuban. The staff shortage has also proven to be a challenge for the chain.
This story originally appeared on Fortune.com
