Walgreens Boots Alliance (WBA) inventory plummeted 20% Thursday morning on the information the corporate slashed its revenue steering, the second time it has adjusted steering downward within the 12 months.Walgreens now estimates earnings per share of between $2.80 and $2.95, down from steering of $3.20 to $3.35 final quarter — when it narrowed steering on the higher finish.Traders are watching the corporate intently as CEO Tim Wentworth executes a brand new technique for the corporate. He’s targeted on what he views as revitalizing pharmacies and pulling again on healthcare providers by VillageMD — of which Walgreens is now not a significant stakeholder.A Walgreens Pharmacy register Pittsburgh. (AP Photograph/Gene J. Puskar, File) (ASSOCIATED PRESS)Amid the shift to downsize unprofitable elements of the enterprise, together with saying further retailer closures, Walgreens can also be combating an issue that different smaller pharmacies are dealing with — pricing pressures from prescribed drugs.”We’re on the level the place the present pharmacy mannequin is just not sustainable and the challenges in our working atmosphere require we strategy the market in a different way. We’re in lively discussions … to align incentives and guarantee we’re paid pretty,” Wentworth mentioned on an earnings name on Thursday.Firm officers expressed concern over pharmacy advantages managers (PBMs) and their position in setting costs for prescriptions, which has squeezed the revenue margin on many medicine. Branded medicine, like the favored diabetes and weight-loss medicine from Eli Lilly (LLY) — Mounjaro and Zepbound — and Novo Nordisk (NVO) — Ozempic and Wegovy — present decrease earnings for pharmacies. Generics, whereas decrease in value, have larger revenue margins. However the provide of generics has been lowering amid ongoing shortages.The web impact is a discount in earnings for the corporate from prescriptions.Shops and shrinkThe firm famous that 100% of its earnings come from 75% of its shops, although Walgreens has but to determine how most of the 25% will shut.Wentworth mentioned he would stay cognizant of the place retailer closures occur, and keep away from including to the burden of pharmacy deserts — areas the place there isn’t any entry to a community-based pharmacy.”We all know we’re the very last thing standing in plenty of areas” and that Walgreens is the final store standing between offering entry or plunging a neighborhood right into a no-pharmacy zone.Walgreens has additionally confronted shrink — an issue plaguing the retail world at-large — and inflation, which is decreasing prospects’ discretionary spending. That’s forcing the corporate to rethink its merchandise. Consequently, shops have decreased their choices, shifting to restricted companion manufacturers in addition to Walgreens’ in-house model.Story continuesCompany officers mentioned on the decision Thursday that the technique shifting ahead will think about the place the corporate must funnel its assets — sustaining medical trials, incentivizing retailer managers, increase specialty pharmacy — in a approach that does not “distract” from shareholder worth and helps enhance earnings.Anjalee Khemlani is the senior well being reporter at Yahoo Finance, masking all issues pharma, insurance coverage, care providers, digital well being, PBMs, and well being coverage and politics. Observe Anjalee on all social media platforms @AnjKhem.Click on right here for in-depth evaluation of the most recent well being business information and occasions impacting inventory pricesRead the most recent monetary and enterprise information from Yahoo Finance