Walgreens CEO Roz Brewer steps down

Walgreens Boots Alliance announced Friday that Roz Brewer has stepped down as chief executive to further focus on its strategy of becoming a healthcare company rather than a drugstore.

She also resigned from the company’s board of directors on Thursday. Sources said the decision was mutual. news release.

Walgreens shares fell about 7% on Friday.

Ginger Graham, lead independent director and healthcare industry veteran, will serve as interim director while the company searches for a successor. Graham is a veteran of the healthcare industry.

Brewer agreed to continue to advise the company until a permanent CEO is elected. He did not immediately respond to a request for comment.

“Our board and management team will continue to strengthen our focus on creating value for our customers and shareholders, as well as our deep healthcare experience to lead in today’s dynamic environment,” said Walgreens Executive Chairman Stefano Pessina. We will proceed with the search for a successor to have.”

Leading up to Friday’s announcement, Brewer and Walgreens were in a tough spot. Walgreens shares are down more than 32% year-to-date as of Thursday’s closing as the company struggles with declining demand for coronavirus tests and vaccines. In addition, front-end retail sales of toothpaste, shampoo, etc., have fallen as consumers turn to competitors such as Walmart and Amazon for daily necessities, such as toothpaste and shampoo, which can be ordered online and delivered within days. is also consistently declining.

The company reported third-quarter results in June, missing Wall Street expectations for the first time since July 2020. It also lowered its earnings forecast for the full year.

However, the number of new coronavirus infections is on the rise again, which could be a tailwind for pharmacy sales. His next Covid booster he plans to start rolling out in mid-September.

Even consumers who aren’t interested in another COVID-19 booster can turn to Walgreens for typical over-the-counter cold and flu products. In the first quarter of the fiscal year ended November 30, an early cold and flu season boosted demand for cough and cold remedies, helping Walgreens offset losses from slowing vaccine demand. did it.

A veteran of Walmart and Starbucks, Brewer has led Walgreens since March 2021. During her brief tenure, which included much of the coronavirus pandemic, the company pursued a transition that positioned Walgreens more as a healthcare company than a pharmacy. chain.

Walgreens recently acquired Summit Health and primary care provider Village MD, opening hundreds of clinics, including clinics adjacent to Walgreens stores.

It also signed deals with CareCentrics, which coordinates home care for patients after they have been discharged from the hospital, and with Shields Health Solutions, a specialty pharmacy company.

Competitor CVS Health is also leaning toward a healthcare strategy. The company announced plans in February to acquire Oak Street Health for about $9.5 billion in cash, adding primary care to its portfolio of medical services. Meanwhile, Rite Aid is focused on expanding its pharmacy presence and is reportedly preparing to file for bankruptcy.

But as Walgreens moved away from its identity as a drugstore chain and leaned toward its goal of becoming a healthcare provider, Mr. Brewer’s skill set didn’t quite align with the company’s goals. Prior to joining Walgreens, he served as Director of Operations and Group President of Starbucks, and previously ran Walmart’s Sam’s Club, where he served as CEO. She held a series of executive positions at Walmart for about ten years.

“The retail segment of the business, where Brewer is far more experienced, is an area Walgreens hopes to pursue as a key growth opportunity,” Neil Saunders, retail analyst and global data managing director, said in an emailed statement. not,’ he said.

“All of this must be disappointing for Mr. Brewer, but it also means he needs a different kind of experience to lead the business. Notably, interim CEO Ginger Graham. He has a deeper background in the healthcare field and the pharmaceutical industry,” he added.

Brewer’s last foray into the health industry ended in the early 2000s when she was an executive at global health and hygiene products company Kimberly-Clark, where she worked for more than two decades.

“WBA is on track to become a leading consumer-focused healthcare company, serving thousands of communities across the country, especially those most in need of access to healthcare,” Brewer said in an announcement Friday. I’m sure there will be,” he said.

Pessina thanked Brewer for his life-threatening work during the COVID-19 pandemic. She joined the company just as the COVID-19 vaccine was becoming generally available, and the early stages of vaccination were marked by tension, confusion and chaos.

“She has further enhanced our consumer-facing capabilities while supporting a culture of community and team member engagement during difficult times,” Pessina said.

Brewer built Walgreens’ vaccine scheduling system and led the team that developed a plan to improve vaccine equity, the company said.

Despite Brewer’s many accomplishments, Pessina called Graham “the ideal person” to serve as the company’s interim CEO given his leadership experience across multiple sectors of the healthcare industry. .

Graham has been on the Walgreens board since 2010 and was appointed lead independent director last October. She started her career at Eli Lilly and has served on the boards of several healthcare companies. She was also CEO of Amylin Pharmaceuticals.