By Dave Sebastian

Walgreens Boots Alliance Inc. said Stefano Pessina has decided to step down as chief executive after five years in the role, and will become executive chairman once the company names his successor.

The largest U.S. drugstore chain by stores on Monday said James Skinner will step down as executive chairman but remain on the board to guide the transition.

The company's shares fell 2.7% in morning trading

Mr. Pessina became the company's executive vice chairman in January 2015 following Walgreens and Alliance Boots' combination in December 2014 and subsequently served as interim CEO before being confirmed in the role in June 2015. He was previously executive chairman of Alliance Boots. Mr. Skinner has been executive chairman since January 2015.

Walgreens Boots Alliance has more than 18,750 stores and about 400 distribution centers supplying more than 115,000 pharmacies, doctors, health centers and hospitals every year, it said. It operates in more than 25 countries.

The company earlier this month said it was cutting about 4,000 jobs in the U.K. and suspending stock buybacks as demand fell in its international business. For its quarter ended May 31, the company said the Covid-19 pandemic sliced about $700 million to $750 million in sales, with most of the effects tied to its retail-pharmacy business overseas. The company generated $34.6 billion in quarterly sales, roughly flat from the year-ago period.

The pandemic has been challenging for drugstores, as patients put off visiting doctors and other health providers. Walgreens has also been cutting costs in its home market and last year said it was closing 200 stores.

Write to Dave Sebastian at dave.sebastian@wsj.com