Walgreens CEO Tim Wentworth told CNBC's Jim Cramer that the company is using its stores and brands to strengthen its evolving health care business.
Walgreens has invested heavily in recent years to expand beyond a drugstore chain into a major health care company. Wentworth acknowledged that the company is closing stores to ensure “well-optimized store footprint,” but that Walgreens has completely pivoted away from stores to pursue its health care goals. He refuted the idea that there was a need to do so.
“If you look in the store, what's going on…8 million vaccines are already in the back of the store this year. It's a health care business, right?” he said. “It's more than just putting medicine in a bottle. It's people touching people. 85,000 of our employees touch people every day, and 10 million people walk through our stores. ”
Wentworth emphasized Walgreens' physical and personal role in local communities, saying customers' trust in the brand is a “leverable asset” the company can leverage as it builds its health services business. .
“When the pharmacist at Walgreens calls you and says, 'Your health insurance covers the vaccination, would you like to come to the store? Can I give it to you?'” From your insurance company. You're four to five times more likely to respond than if you get a phone call and are told the same thing,” Wentworth said. “This is valuable for Medicare Advantage plans, for example. This is one small example of how we can leverage our platform and trust to meaningfully help others in our ecosystem achieve their goals. is.”
Mr. Wentworth returned from retirement and assumed leadership of Walgreens in October 2023. He previously served as CEO of Express Scripts, the nation's largest pharmacy benefits management company, which was acquired by Cigna in 2018.
Walgreens has had a tumultuous few years, struggling with several hurdles including reduced demand for coronavirus-related products, low pharmacy reimbursement rates, competition from online retailers and labor disputes among pharmacy staff. It's here. The company managed to beat Wall Street's profit expectations last week, but it also cut its dividend by almost half and its stock price plummeted.
