Walgreens to close 600 stores

Walgreens expects to close about 600 stores beginning next year in the wake of its purchase of the Rite Aid drugstore chain.

The Deerfield-based company will close stores, mostly Rite Aids, over an 18-month period, Walgreens Alliance Boots CFO George Fairweather said on an earnings call Wednesday.

The company intends to close stores within a mile of another Walgreens or Rite-Aid, a company spokeswoman said.

The nation’s largest and third-largest drugstore chains won regulatory approval last month for a $4.38 billion deal. Walgreens is buying 1,932 stores, three distributions centers and inventory in phases through next spring.

The Rite Aid stores will be rebranded as Walgreens over the next three years.

Walgreens Boots Alliance first proposed a $9.4 billion deal for Rite Aid in 2015. That deal was whittled down to about $6.8 billion earlier this year, until Walgreens walked away from it in June. A merger was revived in September.

On Wednesday, Walgreens blamed termination fees and costs related to its pursuit of rival Rite Aid Corp. for a 22 percent drop in fiscal fourth quarter earnings, which fell to $802 million from $1.03 billion.

The company said it has already acquired its first Rite Aid stores, and it expects to complete all the store transfers by next spring. Walgreens has more than 13,200 stores worldwide.

In the fourth quarter, Walgreens reported adjusted earnings of $1.31 per share, as sales climbed more than 5 percent to $30.15 billion. Analysts expected earnings of $1.22 per share on $30.05 billion in revenue, according to Zacks Investment Research.

Sales at stores open at least a year climbed 3 percent. That’s a key metric for gauging a retailer’s health because it excludes recently opened or closed stores.

For the year, the company reported profit of $4.08 billion, on $118.21 billion in revenue.

Contributing: The Associated Press