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

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Rosalind Brewer has abruptly stepped down as chief executive of Walgreens Boots Alliance after two and a half years when the US-listed pharmacy group’s valuation halved and the group abandoned a planned sale of its UK retail chain.

The retailer, which had already slashed its profit forecast in June, said it now expected its full-year adjusted earnings to be “at or near the low end of its previously stated range” of $4 to $4.05 per share.

A statement from the company said its board and Brewer had mutually agreed that she should leave with immediate effect. She would continue to advise the company as it searched for a permanent successor.

Ginger Graham, a board member since 2010 and former chief of Amylin Pharmaceuticals, will fill the chief executive role while it searches for “a successor with deep healthcare experience”.

Brewer’s unexpected exit comes within five weeks of WBA’s announcement that its chief financial officer, James Kehoe, would be leaving.

Stefano Pessina, the billionaire executive chair whose dealmaking created WBA, recruited Brewer from Starbucks in January 2021, hailing her as a “fantastic operator” who could break the group’s five-year pattern of underperformance.

Brewer, one of the few African-American women to run a company in the S&P 500, arrived as pharmacy chains were being boosted by the strong early uptake of Covid-19 vaccines. However, she has since struggled with weakening vaccine demand, rising retail competition and wavering consumer spending, which have also weighed on rival CVS Health.

At its latest earnings announcement in June she said the group had been hit by “the rapid softening of the macro environment and a more cautious and value-driven consumer”. Despite stronger growth in its sales, Boots is shutting 300 UK stores, the latest of a series of closures, while Walgreens is closing 150 US outlets. The closures come after WBA raised its cost-cutting target in response to the latest figures.

Last summer WBA abandoned an attempt to sell Boots, saying that unexpected upheavals in credit markets had meant that the “significant interest” from potential bidders had not resulted in offers that reflected its potential value.

In a LinkedIn message she described as “one of the most difficult notes I have ever written over the course of my career”, Brewer said she was most proud of overseeing a “strategic pivot” into healthcare, where three acquisitions had opened significant new revenue streams.

Pessina, who owns almost 17 per cent of the company, credited her with navigating the company through the pandemic, overseeing its vaccine rollout and improving its “consumer-facing capabilities”.

WBA shares were down 5 per cent at $24.05 at midday on Friday. They have fallen more than 35 per cent this year to levels previously seen during the global financial crisis, taking the group’s market capitalisation below $22bn.

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