Walgreens Boots chief Rosalind Brewer steps down after latest profit forecast downgrade

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Rosalind Brewer has suddenly resigned as the top executive of Walgreens Boots Alliance following a period of two and a half years. This decision comes as the valuation of the pharmacy group, listed in the United States, decreased by half, and the organization dropped its intention to sell its UK retail chain.

The store, which had already reduced its prediction of profits in June, has now mentioned that it anticipates its yearly adjusted earnings to be "around or close to the lower limit" of the range it previously stated, specifically $4 to $4.05 per share.

In a message released by the company, it was mentioned that the board and Brewer had come to a mutual decision that she should depart from her position immediately. Despite this, she will remain as a consultant for the company while they seek a long-term replacement.

Ginger Graham, who has been on the board since 2010 and previously served as the top executive of Amylin Pharmaceuticals, has been appointed as the interim CEO while they look for a new leader with extensive knowledge in the healthcare industry.

Brewer's surprising departure happens less than a month after WBA revealed that their chief financial officer, James Kehoe, would be stepping down.

Stefano Pessina, the extremely wealthy executive chair who was instrumental in establishing WBA through his successful negotiations, brought on Brewer from Starbucks in January 2021. He praised her highly, describing her as an exceptional individual capable of breaking the group's ongoing trend of subpar performance over the past five years.

Brewer, a notable African-American woman successfully leading a corporation in the S&P 500, joined the pharmaceutical industry at a time when pharmacy chains were experiencing significant growth due to the rapid acceptance of Covid-19 vaccines. Nevertheless, she has faced challenges subsequently, including declining vaccine demand, mounting competition in the retail sector, and unpredictable consumer expenditure, which have similarly affected CVS Health, her competitor.

During its most recent financial report in June, she mentioned that the company had been negatively impacted by the sudden weakening of the overall economic climate and a shift towards more careful and budget-conscious consumer behavior. Despite experiencing better sales growth, Boots has made the decision to close down 300 stores in the United Kingdom, joining a string of previous closures. Additionally, Walgreens is also planning to close 150 retail locations in the United States. These closures come as a response to WBA's decision to increase its cost-cutting objective following the release of the latest financial data.

During the previous summer, WBA decided to give up on their efforts to sell Boots. They claimed that unforeseen disruptions in the credit markets caused the "considerable interest" from potential buyers to not materialize into offers that accurately represented its worth.

In a message she shared on LinkedIn, which she considered to be one of the toughest messages she has ever written in her entire professional life, Brewer expressed her utmost satisfaction about leading a successful shift towards the healthcare sector. This shift involved three valuable acquisitions that brought forth crucial sources of new income.

Pessina, who possesses nearly 17 percent of the firm, praised her for successfully guiding the company amidst the pandemic, supervising the distribution of its vaccine, and enhancing its ability to interact with consumers.

The shares of WBA concluded the day with a decline of 7.4% at a price of $23.43 on Friday. Throughout this year, they have experienced a significant drop of over 37%, reaching levels similar to those observed during the worldwide financial crisis. As a result, the market value of the company has fallen below $22 billion.