Walgreens has announced plans to shut down approximately 1,200 stores within the next three years as the pharmacy chain aims to revitalize its struggling operations in the United States.

On Tuesday, the company revealed that around 500 of these closures would take place in its current fiscal year, which is expected to provide an immediate boost to adjusted earnings and free cash flow.

Leaders at Walgreens Boots Alliance Inc. stated in late June that they were in the final stages of developing a strategy for revitalizing its U.S. operations, which may lead to the closure of various underperforming locations.

Like many of its industry counterparts, the company has been facing difficulties for several years due to reduced reimbursement rates for prescriptions and escalating costs for store operations.

Based in Deerfield, Illinois, Walgreens has also opted not to proceed with plans to establish primary care clinics adjacent to some of its stores, following an aggressive expansion initiative under former CEO Rosalind Brewer.

In August, Walgreens disclosed that it was reevaluating its U.S. healthcare segment and considering the sale of part or all of its VillageMD clinic business. This comes less than two years after the company committed to investing billions in expanding that sector.

As 2024 commenced, Walgreens made headlines by reducing the dividend paid to shareholders, aiming to conserve cash for business development. Subsequently, in June, the company revised down its forecast for fiscal 2024.

On Tuesday, Walgreens’ stock saw an uptick during early morning trading. However, it had experienced a significant decline earlier this year, with its value plunging to $9 as of Monday’s close, representing a drop of nearly two-thirds.