March 28 Reuters Walgreens Boots Alliance recorded a 5.8 billion impairment charge on its investment in VillageMD on Thursday, at a time when the pharmacy operator was aiming to save costs.

The impairment follows years of investment in the cashburning operator of doctors39; clinics during Rosalind Brewer39;s tenure as Walgreens CEO. Brewer wanted to expand the company39;s reach as a healthcare provider.

Walgreens had invested over 6 billion to hold a majority stake in VillageMD over the last few years. It also supported its acquisition of urgent care provider Summit Health with another 3.5 billion investment in 2022.

But the strategy shifted under new CEO Timothy Wentworth, who is focused on improving profitability and announced a 1billion costcutting plan in October.

The company reported a net loss of 5.9 billion for the quarter ended Feb. 29, mainly due to the impairment.

It also cut the higher end of its profit forecast for fiscalyear 2024, citing economic challenges for its retail operations.

The cut in forecast now means there is a lower base for financialyear 2025 earnings to grow from. It only heightens scrutiny on what WBA39;s core earnings power actually is, Leerink Partners analyst Michael Cherny said in a note.

Walgreens has also been grappling with decreased spending on personal care and beauty products by inflationweary consumers, exacerbating the hit from waning demand for its COVID19 vaccines and testing kits.

Shares of the company were down 1.4 in…