Boots owner Walgreens Boots Alliance has slashed earnings guidance following the “most difficult quarter” since its creation in 2014.

The group now expects flat earnings this year, versus previous expectations of growth between 7% and 12%, after enduring tough conditions in its core US and UK markets.

Walgreens Boots Alliance reported a second-quarter sales fall of 1.2% in constant currency at its international retail pharmacy division, which it said was “mainly due to a 1.3% decline in Boots UK”.

The retailer said: “In the UK, comparable pharmacy sales decreased 1.5% and comparable retail sales decreased 2.3%, with Boots UK broadly maintaining market share amid weakness in its categories”.

Adjusted gross profit at the international division slipped 1.2 percent “due to lower sales”.

Walgreens Boots Alliance chief executive Stefano Pessina said: “The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance.

“During the quarter we saw significant reimbursement pressure, compounded by lower generic deflation, as well as continued consumer market challenges in the US and UK. While we had begun initiatives to address these trends, our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations.

“We are going to be more aggressive in our response to these rapidly shifting trends. We are focusing on our operational strengths and addressing weaknesses, making a number of senior appointments to bring change and accelerating the digitalisation and transformation of our business.”