Walgreens Boots Alliance CEO Stefano Pessina Stepping Down

Walgreens Boots CEO Stefano Pessina, who steered the combined US and UK pharmacy group after its merger in 2014, will transition to the role of executive chairman later this year.
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Walgreens Boots Alliance Inc.  (WBA) - Get Report said Monday that CEO Stefano Pessina will step down from his role after five years at the helm of the pharmacy group.

Pessina, 79, will transition to the role of executive chairman, with current chair Jim Skinner stepping aside to make room for the Italy-born billionaire investor, who remains Walgreens Boots biggest individual shareholder. The company said it will begin the search for a new CEO immediately.

“I want to thank our team members around the world for their extensive achievements in the last five years, as we have fulfilled our purpose to help people lead healthier and happier lives,” said Pessina. “I look forward to continuing to serve the company as executive chairman, and to helping to ensure the success of the new chief executive officer in every way possible."

"I am also very glad that Jim and I will continue to work together on the board, and on behalf of the entire company, we greatly appreciate all his contributions during his time as executive chairman,” he added.

Walgreens Boots shares, a Dow component, were marked 1.4% lower in early trading following new of the CEO departure to change hands at $39.77 each, a move that would leave the stock with a 32% year-to-date decline.

The stock, in fact, has fallen 58.4% since Pessina was appointed CEO in July of 2015, compared to a 49.6% gain for the Dow Jones Industrial Average over the same time frame.

Earlier this month, Walgreens Boots posted weaker-than-expected third quarter earnings and suspended its share buyback program, as stay-at-home orders in key markets around the world hit the retailer's top and bottom line. 

Walgreens said adjusted earnings for the three months ending in May, the group's fiscal third quarter, were pegged at 83 cents per share, down 43.5% from the same period last year and firmly below the Street consensus estimate of $1.18 per share. Group revenues, Walgreens said, rose 0.1% from last year to $34.6 billion, just ahead of analysts' estimates of a $34.35 billion tally.

Walgreens also said its biggest quarterly hit came from the United Kingdom, where it operates under the Boots brand and tallied up charges equal to $2 billion, with the company unveiling plans to cut some 4,000 jobs as a result.