CVS Health is planning to close approximately 300 stores a year for the next three years, prompting the store to lower its end-of-year guidance.
CVS (ticker: CVS) will start closing stores and reducing store density in the spring of 2022. The company plans to offer impacted employees roles in other locations or different opportunities within its workforce.
The stock was up 0.2% to $92.05 on Thursday.
Because of the store closures, the company expects to record an impairment charge in the fourth quarter of 2021 of between $1 billion and $1.2 billion, or between 56 cents and 67 cents a share. This brings the 2021 full-year earnings per share guidance range to $5.46 to $5.67, down from $6.13 to $6.23.
“Our retail stores are fundamental to our strategy and who we are as a company,” said Karen S. Lynch, president and CEO of CVS Health, in a statement. “We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.”
The store closures are a bid to restructure the company’s brick-and-mortar retail to adapt to changing consumer behavior.
“The company has been evaluating changes in population, consumer buying patterns and future health needs to ensure it has the right kinds of stores in the right locations for consumers and for the business,” CVS said in a statement.
CVS also will create three new store formats: sites dedicated to offering primary care services, enhanced versions of HealthHUB locations that offer services for everyday health needs, and traditional CVS pharmacy stores.
Write to Sabrina Escobar at [email protected]
