Walgreens taps Pessina as permanent CEO after besting Q3 expectations
- Walgreens' fiscal Q3 earnings were $1.02 per share based on $28.8 billion in revenues—a better than expected haul. Net income was up 82% to $1.3 billion.
- The pharmacy giant will keep the Italian billionaire Stefano Pessina, interim CEO, as its permanent chief.
- Walgreens is engaging in large-scale cost-cutting with plans to close 200 of its roughly 8,000 stores.
Although Walgreens is in the process of shuttering stores in order to cut costs, it will still be the largest U.S. drugstore chain—but for how long? As consolidation accelerates—in June CVS Health Corp bought Target's pharmacy and clinic businesses for $1.9 billion—Walgreen's position as the largest drugstore in the land is being threatened.
At the same time, the trend is moving away from drugstores being just drugstores. In fact, increasingly, as in the case of CVS, drugstores are moving into the healthcare business. That trend is also reflected by another acquisition—the purchase of Envision Pharmaceutical Services by Rite Aid Corp. for $2 billion in February.
While Wagreens has not gone on a buying spree lately, it has been on a cost-cutting mission with the goal of saving $1.5 billion by the end of FY2017. With nine stores closed so far, a plan to close up to 70-plus more this quarter and earnings that were more than 15% higher than expected, Walgreens is on track to achieve its goal of becoming a global healthcare champion.
- Bloomberg Business Walgreens Beats Earnings Estimates, Appoints Pessina as CEO