Walgreens books $5.8-billion impairment charge on VillageMD investment By Reuters

(Corrects company name in paragraph 1, a previous version had same error)

(Reuters) -Walgreens Boots Alliance cut the higher end of its profit forecast for fiscal-year 2024 on Thursday, citing economic headwinds in its retail operations, and took a $5.8-billion impairment charge related to its VillageMD business.

VillageMD, which runs doctors’ clinics, has been losing money and burning cash. Walgreens had invested $5.2 billion to become a majority shareholder in the firm in 2021.

Walgreens has also been grappling with decreased spending on personal care and beauty products by inflation-weary consumers, exacerbating the hit from waning demand for its COVID-19 vaccines and testing kits.

The impairment charge dragged the pharmacy operator into a net loss of $5.9 billion for the quarter ended Feb. 29.

Shares of the company were down 2% at $20.60 in premarket trading.

On an adjusted basis, Walgreens reported earnings of $1.20 per share for the quarter, compared with analysts’ average estimate of 82 cents per share, according to LSEG data.

The company now expects an adjusted profit of $3.20 to $3.35 per share for its financial year ending Aug. 31, compared to the $3.20 to $3.50 per share range it gave in January.