Someone’s not telling the truth about Walgreens’ missed forecast

Back in August when it was announced that Wade Miquelon was leaving Walgreens to pursue opportunities outside the company, the chain and its former CFO were effusive in their praise for one another, despite the separation. That kumbaya moment has apparently deteriorated. Mr. Miquelon is now suing his former employer after Walgreens CEO Greg Wasson and director Stefano Pessina allegedly made false and defamatory comments about him to investors following the split.

When Walgreens issued a press release to announce Mr. Miquelon’s departure, Mr. Wasson said, "Wade’s remarkable leadership, strategic vision and expertise played a critical role in helping Walgreens transition and transform from a 20th century American drugstore chain into a 21st century global health and wellbeing enterprise."

According to Mr. Miquelon’s suit, a Wall Street Journal article from Aug. 19 put the blame on him for a major forecasting error. In the piece, Walgreens former CFO was said to have forecast $8.5 billion in earnings for the company’s pharmacy unit at a board meeting in April. In July, according to the article, he cut that forecast by $1.1 billion. The discrepancy was blamed on errors, in particular those related to generic drug pricing, made by Mr. Miquelon and Walgreens pharmacy chief Kermit Crawford.

The Journal piece went on to report that unnamed directors of the company had called the April forecast "inadequate" and that finance and pharmacy were not "talking to each other."

A Sept. 30 Journal article concluded that "a bungled generics forecast" led to the departure of the two men.

Mr. Miquelon’s suit claims that in remarks to investors and news reporting, he was defamed when it was suggested that he was "personally responsible" for errors in the forecast. The negative press following his departure has cost him work.

 

BrainTrust

Discussion Questions

Will Wade Miquelon’s suit against Walgreens prove a distraction for the company’s management? How would you handle the issue if you were in charge of Walgreens?

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David Livingston
David Livingston
9 years ago

Yes, it will be a distraction. I’ve worked through these before. Forget about right or wrong or who’s to blame. When you have people, often highly-charged, motivated, wealthy, and competitive, they don’t like to lose. Both sides have a lot of financial resources to pull all kinds of dirty and clever tricks. No one is really going to win. When someone sues over wages owed, I’m OK with that. But things like defamation, discrimination, harassment, etc., that to me shows a lack of class. If I were handling things I would get all the top executives some counseling and motivation to help them see beyond the pettiness and put the emotions in check that go with this lawsuit. Revenge is a dish you eat cold. Try to achieve emotional detachment now. Usually when people are in the wrong, it’s a pattern and other misery will fall upon them. As you see this happen, real or imagined, it will help you forget about it. People who file these kinds of lawsuits are usually defeated by their own worst enemy, themselves.

Ian Percy
Ian Percy
9 years ago

We’re sure not feeling the love at Walgreens, are we? I don’t even remotely know the details but it gets down to being clear about your story, hopefully in an honest and constructive way, and sticking to it whether speaking on or off the record. On the surface it looks like the duplicity comes primarily from Walgreens CEO Greg Wasson.

Apparently there was a question of competence but not criminality. The latter would have been easier.

Gordon Arnold
Gordon Arnold
9 years ago

This is a money-grabbing distraction that Walgreen’s will pay for in a lot of ways. The focus needs to be on holiday season shopping for the immediate future and the impact CVS’s tobacco ban may have on prescription sales for the long term. I am confident that executive management is under very close scrutiny, as they should be.

Mel Kleiman
Mel Kleiman
9 years ago

Of course it is a distraction, how could it not be one? Will it affect customers? No. Will it affect stockholders? Possibly. Not long-term. Will it affect the people involved? Yes.

Lesson: Take responsibility as an organization and don’t point fingers.

Act like adults.

James Coolbaugh
James Coolbaugh
9 years ago

This will be a minor distraction for the short term, but it is unlikely to impact any of their current plans, including completing the acquisition of Alliance/Boots.

Walgreens has too much at stake to let it side-track them from their long-term goals. They know where they want to company to be positioned globally and aren’t going to allow something like this to prevent them from obtaining those goals.

I think investors will hold off on any long-term buying until they see how the acquisition is handled and they see the returns that this will bring to the bottom line.

As for customers, most won’t even know this is happening or even care. People just want to know that they can count on their retailers to provide the services they need when they need them.

In the long-run, this lawsuit, while it might be interesting from an intellectual perspective, isn’t really all that unusual or unexpected.