| COMPANY |
Walgreens Boots Alliance, Inc. |
| COURT |
United States District Court for the Northern District of Illinois |
| CASE NUMBER |
24-cv-08559 |
| JUDGE |
The Hon. Joan B. Gottschall |
| CLASS PERIOD |
July 1, 2021, through June 26, 2024 |
| SECURITY TYPE |
Common Stock |
LEAD PLAINTIFF DEADLINE IS NOVEMBER 18, 2024.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
On June 27, 2023, before the market opened, Walgreens announced its third quarter 2023 financial results and revealed that the company’s results came in below analyst expectations for the first time in three years. As a result, Walgreens lowered its earnings guidance for the full year 2023. On the corresponding earnings call, Defendant Rosalind Brewer, the company’s CEO, disclosed that Walgreens had slashed its full year 2023 guidance as the company was “experiencing a slower profit ramp up for U.S. healthcare.” Defendant John Driscoll, the company’s Executive Vice President and President of Walgreens’ U.S. Healthcare, also revealed that “U.S. healthcare missed targets due to VillageMD and CityMD underperformance, directly related to reduced COVID, cold and flu season and softer market demand.” On this news, the price of Walgreens’ common stock declined $2.95 per share, or approximately 9.34%, from a close of $31.59 per share on June 26, 2023, to close at $28.64 per share on June 27, 2023. Then after the market closed that same day, Walgreens announced that Defendant James Kehoe, the company’s CFO, would be leaving Walgreens. On this news, the price of Walgreens’ common stock declined $0.83 per share, or nearly 3%, from a close of $30.63 per share on July 27, 2023, to close at $29.80 per share on July 28, 2023.
Just three months later, on September 1, 2023, Walgreens announced that Defendant Brewer was stepping down as the company’s CEO and as a member of the Board of Directors as of August 31, 2023. On this news, the price of Walgreens’ common stock declined $1.88 per share, or more than 7%, from a close of $25.31 per share on August 31, 2023, to close at $23.43 per share on September 1, 2023.
On January 4, 2024, Walgreens announced its first quarter 2024 financial results and revealed that the company was “evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cashflow, with a balanced approach to capital allocation priorities.” Analysts believed that “the root cause of the significant earnings drag” was due to “operations in their co-located VillageMD/Walgreens centers.” On this news, the price of Walgreens’ common stock declined $1.31 per share, or more than 5%, from a close of $25.57 per share on January 3, 2024, to close at $24.26 per share on January 4, 2024.
Finally, on June 27, 2024, before the market opened, Walgreens announced disappointing third quarter 2024 financial results. On the corresponding earnings call, Defendant Timothy Wentworth, the company’s CEO, disclosed that Walgreens “believe[s] in the future of [VillageMD] and intend[s] to remain an investor and partner . . . as part of our persistent focus on value creation for [Walgreens], we are collaborating with leadership toward an endpoint.” In an interview with The Wall Street Journal, Defendant Wentworth also noted that the company would reduce its stake in VillageMD and no longer be a majority owner. On this news, the price of Walgreens’ common stock declined $3.47 per share, or approximately 22.16%, from a close of $15.66 per share on June 26, 2024, to close at $12.19 per share on June 27, 2024.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, Defendants misrepresented and/or failed to disclose that: (1) despite repeated assurances, Walgreens was not disciplined about deploying capital to grow its U.S. Healthcare segment and did not know how to work with and scale the VillageMD model; (2) Walgreens was not able to profitably scale VillageMD to support the company’s long-term growth initiatives; (3) Walgreens’ rollout of VillageMD clinics was not going according to plan; (4) Walgreens’ U.S. Healthcare segment was experiencing slower growth than expected because Walgreens had oversaturated markets with VillageMD clinics, leading these newly created medical clinics to be understaffed and see fewer patients; (5) Walgreens executives had failed to manage investor expectations regarding the negative impact that the VillageMD expansion would have on Walgreens’ short-term profits, overstatement of the value of VillageMD, and the risk that the company would be forced to divest part or all of its stake in VillageMD; and (6) as a result, Defendants’ statements about the company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.