Walgreens is planning potentially sweeping store closures as it faces what its CEO called a “challenging” environment for pharmacies and U.S. consumers.

The pharmacy chain announced quarterly earnings Thursday morning that fell short of Wall Street expectations. Walgreens’ stock price dropped 22% on the day.

In an interview with CNBC, CEO Tim Wentworth said the company now forecasts weaker consumer spending for the rest of the year.

″We assumed … in the second half that the consumer would get somewhat stronger,” but “that is not the case,’ Wentworth said. 

‘The consumer is absolutely stunned by the absolute prices of things, and the fact that some of them may not be inflating doesn’t actually change their resistance to the current pricing,’ he added. ‘So we’ve had to get really keen, particularly in discretionary things.’

Last month, Walgreens, following Target’s lead, announced plans to slash prices on 1,300 items to better serve customers it said were increasingly under ‘financial strain.’

Wentworth didn’t state an exact number of closures, but it implied it could be as much as 25% of the chain’s approximately 8,600 stores.

“Seventy-five percent of our stores drive 100% of our profitability today,” he said. “What that means is the others we take a hard look at, we are going to finalize a number that we will close.”

Walgreens has contended with difficulties for years.

Its share price has declined steadily for about a decade, dropping from a peak of more than $95 a share in 2015 to less than $15 today. It has reported reduced revenues from prescription drugs, and its retail offerings remain under pressure from both big-box chains and Amazon.com. And it already announced a plan to close 150 U.S. stores last summer.

Today, Walgreens is about one-third the size of its chief rival, CVS, which has also been under pressure over the past two years.

Since the Covid 19 pandemic, Walgreens has gone through a period of executive leadership turmoil: Wentworth was named CEO in October after his predecessor, Starbucks and Walmart veteran Rosalind Brewer, unexpectedly announced her departure less than three years into the job.

A bright spot was its health care segment, which topped revenue estimates. Walgreens views on-site medical services and specialty pharmacy offerings as critical to its push to transform from a major drugstore chain into a large health care company.