Walgreens: Profit hit after sales dip at US pharmacies while Boots enjoys sales rebound
Walgreens Boots Alliance has taken a dent to its quarterly profit while its UK drugstores have enjoyed a sales bounce back.
Drugstore chain Walgreens Boots Alliance Inc WBA.O reported a 13.9 per cent drop in quarterly profit after a decline in sales at its AllianceRX Walgreens business. It said US pharmacy sales fell 3.3 per cent in the quarter.
Net income stood at $883m in the quarter ending 28 February, compared to a $1.03bn a year earlier.
Walgreens posted a three per cent rise in quarterly sales, thanks to the Omicron Covid surge boosting demand for Covid jabs and tests. Sales hit $33.77bn, up from $32.78bn a year earlier.
Across the pond, Boots UK total sales grew 15.2 per cent, with store footfall up 52 per cent versus prior year quarter.
Website sales were up 60 per centversus pre-Covid levels, making 15 per cent of the retailer’s total sales.
According to Evercore ISI, the company would earn between $1.69 and $1.79 per share in the second half of the year versus prior estimates of $1.97.
The chemist has been subject of a fierce bidding war, with the billionaire Issa brothers, who snapped up Asda last year, touted as the current front-runners.
As reported by CityA.M. earlier this month, one of the owners of Boots said floating the chain as a standalone firm was not off the table if private equity firms do not cough up a suitable bid.
Ornella Barra said an IPO had been the preferred initial approach to spin off the chain but had been sidelined after interest from buyout giants.
Walgreens said on Thursday that the strategic review of Boots was progressing well and that it would be seeking outcomes that potentially maximise value.