Following the shocking murder of UnitedHealthcare CEO Brian Thompson, executives are increasingly seeking enhanced security measures. The incident, linked to rising threats in the healthcare sector, has prompted firms like Kroll to report a surge in requests for 24/7 personal protection. This tragic event highlights the growing risks faced by corporate leaders, particularly in industries experiencing public scrutiny.
VillageMD CEO Tim Barry has stepped down, with COO Jim Murray appointed as interim CEO. This change comes amid significant profitability challenges for parent company Walgreens Boots Alliance, which reported an $8.6 billion net loss in FY24 and plans to close 1,200 stores by 2027. Walgreens has indicated that investments in VillageMD are not yielding expected returns, with the healthcare unit losing $134 million last year.
Walgreens is laying off 256 support center employees as part of its ongoing cost-cutting strategy, marking the third round of layoffs in 2024. The company has faced significant financial challenges, reporting a $3 billion loss in Q4 and planning to close 1,200 stores over the next three years to improve cash flow. CEO Tim Wentworth noted that the company has exceeded its cost-saving targets, cutting over $1 billion in expenses and reducing capital expenditures significantly.
UBS has raised its price target for Walgreens Boots Alliance to $10 from $9, maintaining a Neutral rating after discussions with management. CEO Tim Wentworth expressed optimism following positive stock reactions and results, though a recovery in adjusted EPS and free cash flow is expected to take one to two years. The potential sale of VillageMD and/or Summit/CityMD could accelerate this turnaround.
Walgreens plans to close approximately 1,200 unprofitable stores across the U.S. over the next three years, starting with 500 in fiscal year 2025, as part of a turnaround strategy under CEO Tim Wentworth. This decision, affecting about 13% of its locations, comes amid challenges from rising competition and declining drug reimbursement rates, despite a 6% revenue increase last fiscal year. The pharmacy chain reported a $3 billion loss last quarter, highlighting the ongoing struggles within the retail pharmacy sector.
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