Walgreens said Tuesday that it plans to close 1,200 stores over the next three years to further shrink its footprint amid declining sales and changing consumer behavior.

The pharmacy chain said 500 of the closures would occur over the next 12 months. The company estimates that a quarter of its 8,700 stores in the U.S. are unprofitable.

Walgreens announced the closures as part of its fiscal fourth quarter and full-year results, which beat Wall Street expectations. In a statement, CEO Tim Wentworth acknowledged that the company is in the midst of a “turnaround” that will “take time.”

“We are confident it will deliver significant financial and consumer benefits over the long term,” Wentworth said.

In June, Walgreens said it plans to close a “significant” number of its underperforming stores by 2027. Tuesday's announcement appears to be the company's first accurate estimate of how many locations it will close.

Both Walgreens and rival CVS are facing a tough business environment and struggling to be profitable as consumers change their habits.

In 2021, CVS announced it would close about 900 stores, or about 10% of its U.S. locations, from 2022 to 2024. Rite Aid recently emerged from bankruptcy and will operate as a private company.

Pharmacy chains have come under pressure in part from changes in the prescription drug market, including lower reimbursements from pharmacy benefit managers (PBMs), the third-party companies that manage prescription drug benefits for health plans.

PBMs have recently been accused of driving up drug costs and are the target of numerous legislative and regulatory reforms and actions.

The end result was a greater number of “pharmacy deserts” across the United States

“The retail pharmacy industry is in a period of soul-searching, trying to understand the best model to reach the consumer,” GlobalData retail managing director Neil Saunders told CNBC in August.