CEO Credits Walgreens Stores for Expanding Health Care Business

TL/DR –

Walgreens CEO Tim Wentworth has argued that the company is using its stores and brand to bolster its expanding health-care business. The company has been closing stores to optimize its footprint, countering assertions that it needs to pivot away from its stores to meet health-care goals. Wentworth sees the brand as a “leverageable asset” that can be used to build the health services business, with examples including an eight million-strong vaccination effort and a higher response rate to calls from Walgreens pharmacists compared to insurance companies.

Walgreens CEO Discusses Shift to Healthcare

Walgreens CEO Tim Wentworth recently shared with CNBC’s Jim Cramer that the company is leveraging its physical stores for expanding its health-care business. Walgreens, traditionally known as a drugstore chain, has been transforming into a comprehensive healthcare company in recent years.

The company has been shutting down select stores to maintain an “optimized footprint”, without entirely diverging from its physical store assets. Wentworth highlighted the significant role these stores play in healthcare delivery, stating that “eight million vaccines this year at the back of the store already, that’s a health-care business.”

He further emphasized the value of Walgreens’ physical presence in communities, stressing that the trust customers place in the brand can be utilized to boost its health services business.

Wentworth, who came out of retirement to lead Walgreens in October 2023, formerly served as CEO of Express Scripts, the largest pharmacy benefits management company in the U.S. which was acquired by Cigna in 2018.

Despite encountering challenges like decreased demand for Covid products, low pharmacy reimbursement rates, online competition, and labor unrest, Walgreens managed to surpass Wall Street’s earnings expectations recently. However, the company also slashed its dividend nearly by half, resulting in a sharp drop in its stock.

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