Buyers abandon Walgreens, data show - here is why
The company has just reported new losses for its latest financial results.
Whether you need to recover your last prescription, take last minute snacks or get your next vaccine, Walgreens strives To serve consumers in several ways. But despite these efforts, the retailer now seems to have trouble with his customers. Walgreens' latest financial results indicate major losses for the company, consumers who change their behavior. Read the rest to find out more about the reasons why buyers abandon Walgreens.
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Walgreens has just reported new losses.
Walgreens is the last retailer to be confirmed concerning the financial results. In a Press release October 12 , the company announced its report on the results for the fourth quarter and all of its 2023 exercise. According to data, Walgreens Boots Alliance (WBA) reported significant losses for the two gain periods, which ended August 31.
The company suffered a net loss of $ 180 million in the fourth quarter and a net loss of $ 3.1 billion during the year 2023. "Our performance this year did not reflect the strong active WBA active , the inheritance of the brand or our commitment to our customers and our patients ", the interim CEO of the company Ginger Graham said in a press release.
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The company says that consumer behavior is changing.
The last losses seem to be the direct result of a drop in demand. For a October 12 profit call With analysts, the interim managing director of WBA Manmohan Mahajan admitted that retail activity in the United States of the company has been negatively affected by a lower respiratory season than normal and a continuous change in consumer behavior, motivated by a difficult macroeconomic environment ". AE0FCC31AE342FD3A1346EBB1F342FCB
These challenges caused a drop in retail sales at a national level of 4.3% and a 0.5% drop in the total prescriptions completed for the fourth quarter, according to the company's report. Mahajan said that Walgreens' stores experienced an 80% drop in the sale of COVVI-19 test kits, as well as the drop in demand for cough, colds and flu. The company was also affected by a weak summer seasonal sales, "while customers continue to withdraw from discretionary expenses," he added.
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Walgreens works on a major cost reduction initiative.
But the health care company is already trying to overthrow the steam. "In just six weeks, we have taken a number of measures to align our cost structure with our commercial performance, including expected cost reductions by at least 1 billion dollars, and reduces capital expenses by about $ 600 million, "Graham said in an accompanying statement. "We plan to see the impact of these actions during the year 2024, from the second quarter."
Some of the actions that Walgreens undertakes to resolve its financial losses, in particular the reduction of its detail inventory and the optimization of its combination of products, Graham told analysts when the winnings call.
But others say that the retailer should also consider reducing certain costs of products. "Walgreens has lost the share of customers in fields such as beauty and personal care", general manager of GlobalData Neil Saunders said to Reuters . "Some of this is due to the fact that prices remain too high and are not competitive - something more and more buyers will not tolerate in the current environment."
The company also plans to close the stores.
As part of its initiative to save $ 1 billion in the next financial year by reducing all non -essential expenses, Walgreens also looks at its physical imprint. In June, the company announced that it was planning to Close 150 stores In the United States, by the end of the 2024 fiscal year to optimize its portfolio. And when calling the most recent results, officials confirmed that they were still planning to close certain locations, as well as modify the operating hours of stores in various places.
"We are closing unprofitable locations, and this will be accredited in the year," said Mahajan. "We have optimized store hours in certain places to match the place where the local market is already located."
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