Dive Brief:
- Walgreens chief executive Rosalind Brewer is stepping down as CEO and a member of the board effective immediately, the retail pharmacy giant announced Friday.
- Brewer’s departure comes less than three years after she joined the Illinois-based retailer. The parting was a mutual decision between Brewer and Walgreens’ board, according to a release. Walgreens’ lead independent director Ginger Graham will serve as interim CEO while the company looks for a permanent replacement.
- Walgreens also said it expects its 2023 adjusted earnings to come in at or near the low end of its previously stated guidance. The company’s shares dipped in early morning trade Friday following the announcement.
Dive Insight:
Brewer joined Walgreens in March 2021 and oversaw the pharmacy chain’s rollout of COVID-19 vaccines and its strategic pivot to healthcare later that year.
But Walgreens has struggled financially this year amid lower demand for COVID-19 tests and vaccines, along with flagging front-store sales.
Walgreens laid off 10% of its corporate workforce in May, one month before posting third-quarter earnings results that missed Wall Street expectations. Walgreens cut its 2023 outlook along with the results, causing its stock to plummet to its lowest point in more than a decade.
Walgreens — aiming to position itself more as a healthcare company than a pharmacy chain — has been investing heavily in its U.S. healthcare division.
The division, which includes value-based medical chain VillageMD, at-home care provider CareCentrix and specialty pharmacy Shields Health Solutions, situates Walgreens more firmly against rival CVS Health, which also acquired a value-based medical group this year.
The leadership transition “concludes a very challenging period for [Walgreens] and signals the company is looking for a fresh start,” TD Cowen analyst Charles Rhyee wrote in a note on the news.
Walgreens Senior Director of External Relations Fraser Engerman declined to comment on why Brewer is stepping down from the pharmacy chain.
But Walgreens has been looking to beef up its executive roster with veterans of the healthcare industry. The company announced in July that CFO James Kehoe would be leaving in August, and noted it was looking for a replacement with healthcare experience.
In a release on Friday announcing Brewer’s departure, Stefano Pessina, the chairman of Walgreens’ board, said the company is searching for a successor with “deep healthcare experience to lead in today’s dynamic environment.”
Interim CEO Ginger Graham also has more experience in healthcare compared to Brewer, who joined Walgreens after tenures at Starbucks and Walmart.
Prior to joining Walgreens in 2020, Graham held a variety of executive roles at biopharmaceutical and medtech companies.
Brewer will continue to advise Walgreens as it searches for another CEO, the company said.
