Walgreens Boots Alliance announced on Friday that its Chief Executive Officer, Roz Brewer, has decided to step down from her role and from the company’s board, effective Thursday. This move comes as the company is keen on deepening its transition from a traditional drugstore to a full-fledged healthcare provider.
Stock Market Response
- Walgreens’ shares opened more than 2% lower following the announcement.
- The company has seen its shares decrease by approximately 32% this year.
- Since Brewer’s appointment in March 2021, the stock has declined nearly 47%.
Interim Leadership and Future Plans
Ginger Graham, the lead independent director and a seasoned healthcare industry professional, has been named as the interim CEO while the company embarks on the search for a permanent successor. Highlighting Graham’s vast experience in the healthcare domain, Stefano Pessina, Walgreens’ executive chairman, stated, “Our Board and leadership team will intensify our focus on creating value for our customers and our shareholders. We advance the search for a successor with deep healthcare experience to lead in today’s dynamic environment.”
Ginger Graham at a Glance
- Has been on Walgreens’ board since 2010.
- Recognized as the lead independent director in October of the previous year.
- Began her career at Eli Lilly and has held board positions in numerous healthcare companies.
- Served as the CEO of Amylin Pharmaceuticals.
Roz Brewer’s Tenure
Roz Brewer, who previously held executive roles at both Walmart and Starbucks, led Walgreens since March 2021. Under her leadership, the company made significant strides in its transition towards being a healthcare company. Some notable developments during her tenure include:
- Acquisition of Summit Health and primary-care provider VillageMD, which led to the opening of numerous clinics, some adjacent to Walgreens stores.
- Formed partnerships with CareCentrix, focusing on patient home care post-hospital discharge, and Shields Health Solutions, a specialty pharmacy firm.
- Played a pivotal role during the initial days of the COVID-19 vaccine rollout, marked by challenges and uncertainties.
- Instrumental in the creation of Walgreens’ vaccine scheduling system and in driving vaccine equity.
Industry Outlook
The pharmacy retail business has seen a shift with many companies, including competitor CVS Health, moving towards a healthcare model. CVS Health, for instance, announced plans earlier this year to acquire Oak Street Health, adding primary care to its suite of health offerings. On the other hand, Rite Aid is focusing on enhancing its pharmacy presence.
Challenges Faced
The past year has been challenging for Walgreens, with a dip in demand for Covid testing and vaccines. Additionally, there’s been a consistent decrease in front-end retail sales for everyday necessities, as consumers increasingly turn to competitors like Walmart and Amazon, which offer online ordering and rapid delivery.
However, there’s a silver lining as Covid cases surge. This could lead to a spike in pharmacy sales, especially with the rollout of the next Covid boosters expected in mid-September. Furthermore, the early cold and flu season could also push consumers toward Walgreens for over-the-counter medications.
Looking Ahead
Walgreens remains optimistic about its future in the healthcare sector. Brewer expressed her confidence, stating, “I am confident that WBA is on track to be a leading consumer-centric healthcare company, serving thousands of communities across the country, especially those that need access to healthcare the most.”
As the company looks forward to a new chapter in its evolution, Pessina thanked Brewer for her significant contributions during the turbulent times of the COVID-19 pandemic, emphasizing her role in enhancing consumer capabilities and fostering a community-centric culture.
