Walgreens Boots Alliance declared that it is dividing its operations into three business areas as part of its transformation into a “consumer-centric healthcare” company. The most recent change in the “COVID-19 Changed Everything” file may be this action.
This is due to the fact that sales at the largest division of the Chicago-based retail chain, the U.S. Retail Pharmacy segment, decreased by 7% in its most recent fiscal fourth quarter, which ended on August 31, compared to the much smaller U.S. Healthcare division, which operates 13,000 stores throughout the United States, Europe, and Latin America, where they increased 34%.
While noting that domestic digital sales were up, Walgreens CEO Rosalind Brewer said on the company’s webcast that “our script count is the one soft spot for the year to call out.”
Along with a decline in COVID-19 vaccinations and related care, prescriptions are down, and Walgreens, like all of its main competitors, is shifting to provide its clients with a variety of treatments and services that go well beyond selling medication.
Brewer stated on the webinar that “we are quickly growing U.S. healthcare and are already boosting long-term sales forecasts with a clear path to reach profitability starting in fiscal year ’24.” “Although it’s still early, our plan is bearing fruit, and each of our four priorities—simplifying—is doing well.
Simple and Powerful
The truth remains that Walgreens shops accounted for 82% of its sales, or $26 billion of its reported top line of $32 billion, compared to just $622 million provided by its newly elevated U.S. Healthcare sector. While simplicity and strength are admirable goals for any firm.
Nevertheless, pointing to the historical macro issues that are impacting its consumers, Walgreens’ executive team informed investors that this is the ideal time to grow and expand the firm.
Brewer said that consumers today prioritize health and well-being more highly than they did two years ago because of the four-decade-high inflation rate and their expressed anxiety about the future.
Domestic Care
As evidenced by the accelerated acquisition plan to full ownership of CareCentrix announced earlier this week, Walgreens is promoting its enhanced offering in the quickly expanding in-home treatment business as a centerpiece of its consumer-centric focus in addition to continuing to expand the increased in-store activities of the COVID-era. Brewer informed investors that CareCentrix’s addition to Walgreens’ Village MD and Shield businesses resulted in top-line growth of 75% for the company’s U.S. Healthcare sector.
