Boots reports modest growth as parent company cuts losses amid sale rumours
Boots parent company Walgreens Boots Alliance (WBA) has stressed that “everything [is] on the table” to “increase cash flow” as it cuts its financial losses.
Boots has reported a modest increase in pharmacy sales of “0.8% compared with the year-ago quarter” for the first fiscal quarter of this year, which ended November 30 2023.
However, WBA’s financial report for the first quarter of 2024, which was published last week (January 4), showed that Boots’ retail sales had increased 9.8% over the same period – with overall Boots UK sales growing 6.2%.
The multiple’s online store also performed “strongly” with “sales growing 17.5%”, it said.
Meanwhile, the parent company said that it made a net loss of $67 million in the first quarter of the year – down from $3.7 billion in the year-ago quarter.
“Everything on the table”
The company added that it was “evaluating all strategic options to drive sustainable long-term shareholder value” amid a “challenging consumer backdrop”.
During WBA’s quarterly earnings conference call, chief executive officer Tim Wentworth said he would act “with everything on the table in terms of putting our business on the right tracks”.
Mr Wentworth cited “structural headwinds in our core pharmacy business” while explaining the financial results.
“In that context, we are taking swift action to right-size costs and increase cash flow”, he added.
When asked by C+D whether this includes selling or floating Boots UK, WBA declined to clarify.
New sales rumours
Mr Wentworth’s statement comes after Bloomberg reported last month that WBA was said to be considering listing the £7bn UK pharmacy chain on the stock exchange.
In November, C+D reported that WBA had made a £4.8bn deal to hand over responsibility for all Boots pensions to financial service provider Legal and General (L&G) over the next two years.
Earlier that month, The Times reported that “City sources” believed WBA could “restart the Boots sale process…within the next six months”.
The new sales rumours come after WBA announced last year that it had ultimately decided not to sell the UK pharmacy chain.
At the time, it cited “market instability” as the reason why no prospective buyers were able to make an offer “that adequately reflects the high potential value” of Boots.
Meanwhile, the pharmacy union has launched the “first stage” of a formal complaints process in a dispute regarding the multiple’s changes to employee pensions.
