Chemist & Druggist is part of the Informa Tech Division of Informa PLC


This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


This copy is for your personal, non-commercial use. Please do not redistribute without permission. Printed by #UserName#, #Company_Name#


Printed By

UsernamePublicRestriction

Boots’ parent attributes 26% profit drop to ‘lower UK retail sales’

Boots’ parent company has largely blamed a 26% drop in adjusted gross profit in its international retail pharmacy division in the three months to August on “lower UK retail sales”.

Adjusted gross profits for the international retail pharmacy division – which includes Boots UK – dropped 26% for the June-August period, compared to the same quarter a year ago, Walgreens Boots Alliance said yesterday (October 15).

In its latest financial report, the company said the profit decrease, which was on a constant currency basis, “reflects lower UK retail sales, higher fulfillment costs, marketing investments to drive customer traffic and lower fixed supplier contributions”.

Reduced footfall in UK

Comparable retail sales for Boots UK decreased 29% on a constant currency basis, as footfall in stores “continued to be significantly reduced due to COVID-19, particularly in major high street, train station and airport locations”, Walgreens Boots Alliance said.

However, footfall “did improve steadily in the fourth quarter compared with the third quarter”.

The COVID-19 pandemic “continued to impact heavily on buying habits and consumers temporarily shifted purchasing to one-stop grocery shopping”, it added.

Boots.com sales rose 155%, however, compared with the same quarter last year, “partially offsetting the reduced footfall”, the company said

15% drop in sales

The international retail pharmacy division as a whole saw sales of $2.3bn (£1.7m), a 15% decrease, on a constant currency basis. This drop was “mainly due to a 17% decrease in Boots UK sales”, the company said.

Adjusted operating income decreased $197m (£150m), to an adjusted operating loss of $3m (£2.3m) for June-August

The estimated financial impact of COVID-19 on both operating income and adjusted operating income across the international retail pharmacy division was “approximately $300m (£232m),” the company said.

Pharmacy sales up

Comparable pharmacy sales for Boots UK “increased 0.4% on a constant currency basis, reflecting favorable timing on NHS reimbursement”, Walgreen Boots Alliance said.

This “mitigated the impact of lower prescription volume and reduced demand for pharmacy services during the pandemic,” it added.

Wholesale sales up

The company’s wholesale division – which includes Alliance Healthcare in the UK – saw sales increase 4.3% on a constant currency basis, compared with the same period last year, with sales of $6bn (£4.5bn).

Overall sales for the quarter across the whole of Walgreens Boots Alliance increased 2.3% to $35bn (£27bn), compared with the same period last year, but adjusted operating income across the group fell 27% on a constant currency basis.

The end of August was also the end the Walgreens Boots Alliance 2020 financial year, with adjusted operating income down 25%, on a constant currency basis, for the fiscal year. The company said it “estimates adverse COVID-19 impact of approximately $1.2bn (£1bn)” for this period.

What do you make of the fourth quarter financial results?

Related Content

Topics

Pre-reg Trainee

Tonbridge, Kent

 Salary: £22,000

Apply Now
UsernamePublicRestriction

Register

CD006783

Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Thank you for submitting your question. We will respond to you within 2 business days. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel