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Walgreens books hefty charge as the drugstore chain adjusts the value of struggling clinics

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Walgreens lost nearly $6 billion in its second quarter mainly due to a drop in value for the VillageMD clinic business it controls.

Excluding that charge, the drugstore chain reported results Thursday that topped Wall Street expectations.

But the drugstore chain said Thursday that it recorded a $5.8 billion, after-tax impairment charge for VillageMD in its most recent quarter as it adjusted the asset’s value. The company is dealing with slower-than-expected growth in patients and changes to reimbursement from the federal government’s Medicare program, among other challenges. Walgreens executives said Thursday that VillageMD is closing around 160 clinics, or 100 more than it previously announced.Walgreens announced its VillageMD partnership in 2020.

But the drugstore chain has since changed CEOs. New leader Tim Wentworth has turned the company’s focus more to cutting costs and improving profitability.

 

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