Boots: Walgreens’ shares slashed amid store closures despite UK success
Shares in the US owner of Boots have been slashed 20 per cent amid a “challenging US retail environment”, despite high street pharmacy giant Boots reporting UK sales growth.
Boots delivered its 13th consecutive quarter of market share growth in the three months ended May 31, 2024, with both its retail and pharmacy divisions seeing increased sales.
Retail sales rose by six per cent during its last quarter, while pharmacy sales were up 5.8 per cent.
The company said this was driven by increased take up of its healthcare services, which include travel services and vaccinations.
It added that its previous investment in the Boots app had resulted in more customers choosing to shop via their phone with app sales “growing significantly” in the three months to the end of May 2024.
Boots UK revealed higher sales across its pharmacy and retail businesses over the quarter.
However, total sales growth slowed to 1.6 per cent as it was impacted by store closures over the past year.
Over the past 12 months, Boots has shut around 300 shops to take its store estate down to 1,900 sites.
Sebastian James, Boots UK CEO, said: “This is another set of consistently strong results for Boots.
“I am pleased to see our positive momentum continue across the whole business, with both retail and healthcare increasing sales and a thirteenth consecutive quarter of market share growth.
“We continue to focus on making exciting new brands and services accessible, whilst focusing
on value and rewarding loyalty.
“We are committed to delivering a fantastic experience for customers however they shop with us.
“I would like to thank our incredible team members for their continued hard work and ongoing
commitment to deliver for our customers every day.”
Profit forecasts cut in the US
Despite Boots’ impressive performance in the UK, its parent company Walgreens Boots Alliance said that it plans to shut more of its underperforming US shops following a strategic review.
The company also cut its earning per share guidance for the financial year to August 2024, amid a “challenging US retail environment”.
Overall group sales were 2.6 per cent higher at $36.4bn (£28.8bn) for the quarter to May 2024, as its US business saw stronger pharmacy sales offset a retail slump.
Its total revenue in the nine months ended May 31, 2024 was $110bn (£86.9bn) – an increase of more than six per cent on the $103bn (£81.4bn) it reported in the nine months ended May 31, 2023.
Will Boots list on the London Stock Exchange?
Hopes that Walgreens Boots Alliance would list the pharmacy giant in the UK were dashed last month when the US firm revealed it had parked plans to take the company public.
Reports had been swirling for almost a year about whether the move would happen, after stories hit the British press in December 2023 that the company had sold its pension scheme to Legal & General for £4.8bn.
Boots’ abandoned IPO plans come amid a challenging time for London’s public market, with a number of high profile firms leaving such as TUI.