As part of a plan to save $50 million annually, Walgreen Co. (WAG) is closing some 76 unprofitable stores while opening others in emerging markets.
In a conference call with investors, Walgreen Chief Executive Greg Wasson said the decision will “optimize our footprint and ensure our stores remain at the best corners of America.”
Walgreens would not immediately say which stores would be closed, but that they would be spread across the country.
WAG will notify store employees first before making the news public, though the company did note that employees would be reassigned and most of the store closings were ones near other Walgreens.
The move comes as WAG increasingly eyes competition with CVS — and pushes to advance WAG stock standings.
Via the Chicago Tribune:
Walgreen will take charges of between $240 million to $280 million in its third and fourth quarters related to the closures.
The company also on Tuesday said second quarter net income fell slightly to $754 million, or 78 cents a share, down from $756 million, or 79 cents a share, in the same period a year ago, as a slower cold and flu season and severe weather throughout much of the United States dragged on profits. … Adjusted for certain items, net income was 91 cents a share, down from 96 cents a year earlier, missing Wall Street estimates by a penny.
At the same time, the company also announced it would not eliminate tobacco products from its stores, as CVS had made the decision to do.
WAG stock is up some 4% in early morning trading.