US: Walgreens Boots Reports Lower-Than-Expected Q2 Sales

Walgreens Boots Alliance has reported weaker-than-expected sales figures for its fiscal second quarter, although profits were in line with forecasts.

For the three months to 28 February, sales were down 2.4% year-on-year to $29.4bn, although they were up 2.2% on a calendar-adjusted, constant-currency basis. Net profit jumped up 14% to $1.1bn, although it was up just 6.2% on an underlying, constant-currency basis. Operating profit slumped by 20.5% to $1.5bn (-2.7% underlying, constant-currency), hurt by costs related to its cost transformation programme.

In the US, the group saw sales grow by 1.5% to $21.8bn, and by 2.4% on a like-for-like basis.  Pharmacy sales were up 3.7%, on 4.2% LFL growth, helped by higher volumes and a 7.9% rise in prescriptions (its highest growth in more than seven years).  However, Retail sales were down 2.7%, on a 0.8% LFL decline, as weaker demand for personal care and consumables offset growth in health & wellness and beauty.

International sales slumped by 14.5% to $3.1bn, although they were down just 1.9% on a constant-currency basis, with LFL sales down 0.9%.  Pharmacy sales were down 3.7% on a LFL basis (constant-currency), while Retail sales were up 0.6% on the same basis.

Finally, its Pharmaceutical Wholesale unit saw sales drop by 10.6% to $5bn, although LFL sales were up 5.2% on a constant-currency basis.

Stefano Pessina, Executive Vice Chairman and CEO, said: “Our results this quarter were in line with our expectations despite some challenging conditions we faced in a number of markets. I am particularly pleased with the growth in pharmacy volume and market share in the Retail Pharmacy USA division, which saw the highest comparable prescription growth in more than seven years.”

The group reiterated its financial forecast for the year, and offered no new details of its proposed Rite Aid merger.