Walgreens announced last week that it would close 160 of its VillageMD clinics after it recorded a nearly $6 billion non-cash impairment charge in the second quarter, the company said.
According to Walgreens, the drugstore chain invested $1 billion in VillageMD in 2020 and then put another $5.2 billion into the primary care company in 2021. VillageMD was part of Walgreens’ push to expand beyond its legacy pharmacy operations, Reuters reported.
The company lost $5.8 billion on the investment in the clinics in the second quarter when they underperformed, according to company officials in an earnings call.
Last fall, Walgreens announced plans to close 60 clinics and leave five markets to cut costs.
VillageMD now plans to close an additional 100 clinics, Walgreens CEO Tim Wentworth told investors during the company’s fiscal 2024 second-quarter earnings call Thursday.
Wentworth said the company was now “reviewing every business through a longer-term lens” to focus on cost savings and strategic fit.
Walgreens had a second-quarter sales increase of 6.3% from a year ago to reach $37.1 billion, according to its second-quarter earnings report.
Net loss in the second quarter was $5.9 billion, reflecting the $5.8 billion non-cash impairment charge related to VillageMD.
© 2024 Cox Media Group
