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Walgreens Names Former Rite Aid CEO Standley to Oversee U.S. Business

Former Rite Aid CEO John Standley is named president to oversee Walgreens' U.S. operations.
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Walgreens Boots Alliance  (WBA) - Get Walgreens Boots Alliance Inc Report announced the appointment of former Rite Aid CEO John Standley as president to oversee the company’s U.S. operations.

His appointment is effective immediately.

Walgreens bought 1,932 Rite Aid stores and three distribution centers for $4.4 billion in 2018.

Standley replaces Richard Ashworth, who departed Walgreens earlier this year to become CEO of Tivity Health. Co-Chief Operating Officer Alex Gourlay was in charge of U.S. operations during the job search.

Walgreens shares recently traded at $38.07, down 1.78%, and have slumped 27% year to date. Walgreens’ prescription business has performed well over the last several years, but the retail side has been more problematic.

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Also, Walgreens has been unable to match the partnerships of its competitor CVS Health  (CVS) - Get CVS Health Corporation Report, which acquired pharmacy benefit manager Caremark in 2007 and insurance provider Aetna in 2018.

Walgreens did announce plans in July to expand its physician practices initiative with VillageMD. It is focusing on cutting costs too.

Also in July, Walgreens CEO Stefano Pessina announced that he will exit his position and become executive chairman of the company, which is looking for his successor.

Morningstar analyst Soo Romanoff wasn’t too impressed with Walgreens’ earnings report last month.

“Narrow-moat Walgreens reported weaker-than-expected third-quarter results, largely hampered by coronavirus pandemic adversities in the U.K. Normalized earnings of $0.83, or roughly half the performance from the prior year, were woefully short,” she wrote in a commentary. "All eyes are on cost-savings initiatives to weather the Covid-19 pandemic." 

Still, Romanoff puts fair value for Walgreens stock at $48, about 26% above its current level.