Walgreens tells analysts: Closing 600 stores will save $300M

Some Tri-City drugstores could close as part of a national cost savings announcement by Walgreens’ parent company.

Walgreens Boots Alliance Inc. will close 600 unidentified drugstores as part of its amended $4.375. billion megadeal for the assets of rival Rite-Aide Corp.

Walgreens officials made oblique references to a “store optimization” strategy in its fourth quarter statement Wednesday.

It offered more details in a related presentation and conference call with analysts.

The Deerfield, Ill.-based company has not disclosed what stores will close, but local closures are likely. Walgreens and Rite Aid operate six stores each in the Tri-Cities, many in extremely close proximity to one another.

The move to streamline the consolidated business will cost about $450 million but will yield roughly $300 million in annual cost savings by the end of its 2020 fiscal year, Walgreens said in its financial statements and investor presentation.

The deal covers 1,932 Rite Aid stores, three distribution centers and Rite Aid Corp. inventory.

Walgreens (NASDAQ: WBA) secured regulatory approval under the Hart-Scott-Rodino Antitrust Act to close the Rite Aid deal in September. The company will continue to acquire individual Rite Aid locations over the coming year.

Wednesday, Walgreens reported fourth quarter net earnings of $802 million on $30 billion in sales. or 76 cents per diluted share.

Its share price closed at $69.36, up $2.07.

This story was originally published October 25, 2017 at 6:06 PM with the headline "Walgreens tells analysts: Closing 600 stores will save $300M."