Walgreens Boots Alliance (Walgreens) reported a staggering loss of $5.9 billion at the end of the second quarter of its 2024 fiscal year following the departure of Roz Brewer, one of the world’s highest-ranking Black CEOs. The loss, revealed in its latest financial report, underscores the challenges confronting the retail titan headquartered in Deerfield.
Despite exceeding revenue estimates for the fiscal second quarter, Walgreens experienced a sharp downturn, recording a net loss of $5.9 billion, or a loss of $6.85 per share, compared to a net income of $703 million, or 81 cents per share, in the corresponding period last year. The unexpected loss primarily resulted from a $5.8 billion after-tax non-cash impairment charge related to VillageMD goodwill, an investment initiated during Brewer’s tenure.
Walgreens bets on VillageMD hit snag, new CEO charts course
Walgreens Boots Alliance WBA US, under the leadership of former CEO Roz Brewer, made a hefty $6 billion-plus investment in VillageMD, a Chicago-based healthcare startup. The aim was to expand beyond traditional pharmacy operations.
However, VillageMD faced challenges, prompting a strategic reevaluation. The company announced the closure of over 60 clinics, not 160, with a shift towards denser areas to optimize patient care efficiency.
Brewer’s departure in September 2023 marked a turning point for Walgreens. The new CEO, Tim Wentworth, who took the helm in October 2023, inherits a company navigating turbulent waters. Wentworth’s focus is on restoring profitability through cost-cutting initiatives and portfolio reviews.
In a recent statement on financial results, Wentworth struck a cautiously optimistic tone. He pointed to positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the U.S. healthcare sector for the first quarter. Walgreens remains committed to cost savings, targeting $1 billion in fiscal 2024 through measures such as layoffs, store closures, and supply chain optimizations.
Walgreens Boots Alliance: A leadership shift
Walgreens Boots Alliance (WBA), headquartered in Deerfield, Illinois, is a global leader in integrated healthcare, pharmacy, and retail. The company operates prominent pharmacy chains like Walgreens in the U.S. and Boots in the UK, alongside pharmaceutical manufacturing and distribution businesses.
Roz Brewer’s resignation in September 2023 marked the end of an era for Walgreens Boots Alliance. Previously lauded as the “world’s highest-ranking Black CEO,” Brewer made history as the first Black woman to lead an S&P 500 company when she took the helm in March 2021. Her tenure was marked by recognition for leadership, innovation, and a strong commitment to diversity and inclusion.
