Just some years after Walgreens Boots Alliance (Nasdaq: WBA) determined to focus completely on healthcare, it’s largely returning to its roots. It additionally plans to shut as many as 1,200 shops over the following three years as a consequence of a monetary downturn.

Walgreens CEO Tim Wenworth — who took over as the corporate's chief govt final October — stated throughout an earnings name on Tuesday that the corporate would “refocus” its operations to concentrate on retail pharmacies.

“WBA is refocusing on its historic strengths as a retail pharmacy-led firm,” Wentworth stated. “This reorientation permits us to make optimum use of our most essential strategic property, particularly shopper belief, comfort and relevance. Our place of belief comes from the hundreds of thousands of face-to-face interactions our customers have with our pharmacy workers every single day, and we are going to proceed to take motion now – and for the long run – to be the primary alternative for retail pharmacy and healthcare companies. Now that now we have gained the belief of our customers – our motive for existence – we additionally wish to be accessible and handy, however now we have to have the suitable dimensions.”

Wentworth stated that of the greater than 8,000 Walgreens shops, about 6,000 are worthwhile. With that in thoughts, and to “right-size,” the corporate is closing a majority of shops that aren’t worthwhile.

That can be a part of an effort to steadiness the finances. The refocus in direction of retail pharmacies follows a strategic evaluate of property, which passed off earlier this 12 months after Wentworth took over.

Walgreens has poured greater than $6 billion into home- and community-based major care supplier VillageMD, however lately lowered the latter's bodily footprint. VillageMD is a part of Walgreens' U.S. healthcare phase, which additionally contains post-acute care platform CareCentrix.

Whereas healthcare and the US healthcare phase have been highlighted as priorities for the long run in 2021 and 2022, Walgreens now seems to be shifting away from that for probably the most half.

“We imagine our reorientation in direction of retail pharmacies has a vibrant future,” stated Wentworth. “We’re engaged in a multi-year program with the long-term purpose of getting a right-sized and well-positioned retailer fleet, and an industry-leading buyer expertise in each retail and pharmacy throughout shopper channels. And we proceed to imagine that the adjoining strategic companies by which now we have invested can incrementally contribute to longer-term worth creation.”

Wentworth additionally known as VillageMD “not a vital a part of the corporate's future.”

Walgreens' peer, CVS Well being (NYSE: CVS), has additionally confronted monetary turbulence lately, after investing closely in healthcare companies lately. Whereas Walgreens has VillageMD and CareCentrix, CVS Well being has Oak Road Well being and home-focused value-based care platform Signify Well being.

General, the strategic resolution to focus extra on healthcare companies following the peak of the COVID-19 pandemic has not gone easily for both firm.

“A lot of our actions throughout this turnaround will take time, however I’m assured now we have the suitable crew, the suitable focus and the suitable technique,” Wentworth stated.

General, Walgreens' fourth-quarter gross sales rose 6% 12 months over 12 months to $37.5 billion. Nevertheless, working losses within the fourth quarter amounted to $978 million.