Boots reported another strong set of results for its latest quarter, but parent Walgreens Boots Alliance (WBA) swung to a loss during the period.
For the three months to 29 February 2024, the Boots chain saw retail sales grow by 5.9%, helped by increased footfall both in-store and online. The company noted that the quarter marked the 12th straight three-month period where it grew its market share.
In-store sales were up 4.5% for the period, with Boots saying its flagship, shopping centre and travel stores performed particularly well. Meanwhile, its airport stores saw double digit growth year-on-year, helped by the opening of a new store at Luton, and refurbishments at Gatwick and Manchester.
Boots’ online store and app also continued to grow rapidly, with digital sales up 16.8% for the period, driven by particularly strong sales of beauty and personal care products.
In healthcare, Boots saw services deliver growth of almost 40% driven by continued strong performance of Boots Online Doctor, with weight loss proving the most popular and fastest growing service. In retail health, steady sales growth was driven by gains in the Boots own label range, with vitamins and pain relief performing particularly well.
Sebastian James, CEO of Boots UK & ROI, said: “I am really pleased to see our positive momentum continue across the whole business, with more people shopping with us both online and in-store, and strong gains in both our key markets of healthcare and beauty.
“I am particularly proud of our pharmacy team, who worked incredibly hard to launch Pharmacy First in England; the feedback from patients has been brilliant, and it is clear that they value the convenience of accessing a trusted healthcare professional on their local high street with no appointment necessary. We see a significant opportunity to do more in this area, helping customers to get better quickly, supporting communities and relieving the burden on the NHS.”
Meanwhile, parent WBA saw its second-quarter sales grow by 5.7% on a constant-currency basis to $37.1bn, and adjusted net profit increase by 3% to $1bn. However, it also saw its adjusted operating profit drop by 26.5% to $900m and reported loss increase to $13.2bn due to impairment charges related to VillageMD.
The US Retail Pharmacy unit saw sales grow by 4.7% to $28.9bn, helped by an 8.2% rise in Pharmacy sales, which offset a 4.5% decline in Retail sales. Pharmacy sales were boosted by a 2.7% rise in prescriptions filled, while Retail sales were impacted by seasonal trends. Meanwhile, International sales rose by 3.2% to $6bn on a constant-currency basis.
CEO Tim Wentworth said: “We’re encouraged by our first quarter of U.S. Healthcare positive adjusted EBITDA and continued topline growth alongside another quarter of strong execution in pharmacy, as we look to re-energise and evolve its impact both at Walgreens and at large.”
He stated that WBA was “confident in our goal of achieving $1bn in cost savings this year”, adding that the group is “continuing to strategically review our portfolio over the next three months in an effort to ensure it drives growth and delivers value.”
NAM Implications:
- All the more reason for WBA to accelerate moves to sell/refloat their UK operation…
- Pharmacy First will have a major advantage over smaller community pharmacy rivals…
- …in that smaller pharmacy outlets with less space for waiting ‘patients’…
- …brings with it the risk that shoplifting of smaller valuable items will increase…
- …unlike Boots branches where extra space will make monitoring of ‘patients’ more effective.
