Walgreens CEO Tim Wentworth told CNBC’s Jim Cramer that the company is using its stores and brand to bolster its developing health-care business.
Walgreens has made significant investments over the past few years to expand beyond a drugstore chain into a large health-care company. Wentworth acknowledged that the company has been closing stores to make sure it has the “right optimized footprint,” but challenged the notion that Walgreens has to fully pivot from its stores to pursue its health-care goals.
“If you look at the stores and what goes on … eight million vaccines this year at the back of the store already, that’s a health-care business, right?” he said. “That’s not just putting pills in bottles, that’s people touching people — 85,000 of our people touching people every day, 10 million people that walk in our store.”
Wentworth emphasized Walgreens’ physical and personal role in communities, calling customers’ trust in the brand a “leverageable asset” the company can use as it builds its health services business.
“When a Walgreens pharmacist calls you and says, ‘Hey, your health plan would cover a shot for you, would you like to come into the store and we can give it to you?’ You are four to five times more likely to respond to that than if someone from the insurance company calls you and tells you the same thing,” Wentworth said. “That’s valuable for your Medicare Advantage plan, for example. That’s one little example of the way that we can leverage the platform and the trust to meaningfully help others that are in the ecosystem to achieve their goals.”
Wentworth came out of retirement to take the reigns at Walgreens in October 2023. He previously served as CEO of the country’s largest pharmacy benefits management company, Express Scripts, which was acquired by Cigna in 2018.
Walgreens has had a rocky few years, struggling with several hurdles including decreasing demand for Covid products, low pharmacy reimbursement rates, competition from online retailers as well as labor unrest from pharmacy staff. The company managed to beat Wall Street’s earnings expectations last week, but it also cut its dividend nearly in half, causing its stock to plummet.
