Walgreens says it will close 1,200 stores by 2027, as earnings top estimates

Walgreens on Tuesday reported fiscal fourth-quarter sales and adjusted profit that beat Wall Street's expectations, as the company slashes costs in an attempt to steer itself out of a rough spot.

The retail drugstore chain also said it plans to close roughly 1,200 stores over the next three years, which includes 500 in fiscal 2025 alone. The company said those closures will be "immediately accretive" to its adjusted earnings and free cash flow.

Walgreens has around 8,700 locations in the U.S., a quarter of which it says are unprofitable. 

The company's shares jumped about 8% in premarket trading.

The results cap a rocky fiscal 2024 for Walgreens, which is grappling with pharmacy reimbursement pressure, softer consumer spending and challenges related to its push into primary care, among other issues. The company on Tuesday said it surpassed its target of slashing $1 billion in costs during fiscal 2024, which included shuttering underperforming stores, laying off employees and using artificial intelligence to make its supply chain more efficient, among other efforts. 

In June, Walgreens said it intends to close a "significant" number of its underperforming stores by 2027. Tuesday's announcement appears to be the company's first exact estimate for how many locations it will shutter.

Here's what Walgreens reported for the three-month period ended Aug. 31 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Walgreens booked sales of $37.55 billion for the quarter, up 6% from the same period a year ago. 

The company reported a net loss of $3 billion, or $3.48 per share, for the fiscal fourth quarter. That reflects a so-called valuation allowance meant to reduce the company's deferred tax assets mainly