Walgreens built a healthcare empire on VillageMD — and wrote off $5.8B

Walgreens Boots Alliance spent years and billions of dollars building a healthcare arm around VillageMD, the primary-care chain it backed into a majority holding, and then subsidised VillageMD's purchase of Summit Health and CityMD. The bet was booked as goodwill. On 28 March 2024, with fiscal Q2 results, the bill arrived: a $12.4 billion non-cash impairment of VillageMD goodwill, of which $5.8 billion landed on Walgreens' own income statement after tax and minority interests.

The write-down came with retreat. VillageMD had already announced exits from Florida, Indiana, Chicago, Boston, Rhode Island and Las Vegas, shrinking its footprint to about 140 locations, while the US retail pharmacy business that was supposed to feed patients into the clinics saw sales fall 4.5% in the quarter. Walgreens' first-half net loss reached $6.0 billion, and full-year earnings guidance was cut to $3.20–$3.35 a share.

The full year closed with a net loss attributable to Walgreens of $8.6 billion — up 180% from the year before — on $147.7 billion of revenue. Chief executive Tim Wentworth called fiscal 2025 an 'important rebasing year'. The healthcare strategy had not failed at the clinic counter; it had failed at the price paid for it.