Boots has suffered a slump in profit during the first half of its financial year, following a fall in sales and increased technology investments.

The health and beauty retailer’s adjusted operating income tumbled 29.1% to $276m. Sales dropped 2.2% to $5.8bn, while margins slipped 180bps to 4.8%.

Parent company Walgreens Boots Alliance (WBA) attributed the erosion of its bottom line to lower sales, the impact of bonus payments and its investments in technology.

Walgreens said that, amid the ongoing coronavirus crisis, it was “proactively deferring certain activities”, including the rollout of new beauty halls in Boots’ UK stores.

It has already revamped 26 stores with its new beauty format and introduced nine new beauty brands during its second quarter.

Across the wider WBA group, adjusted operating income fell 13.6% on a constant currency basis to $3.16bn. Sales climbed 3.2% to $70.16bn.

Walgreens said that, prior to the coronavirus outbreak, it was “on track” to meet market expectations. But it scrapped full-year guidance after warning of the “uncertain” impact of the pandemic.

It said: “Although the Covid-19 situation is ultimately temporary, given the many rapidly changing variables related to the pandemic, at this time WBA is not in a position to accurately forecast the future impacts.

“The company will continue to closely assess and manage this situation, and will provide further updates in the next earnings report when both the potential positive and negative effects of the pandemic will be known in more detail.”

Chief executive and executive vice chair Stefano Pessina said: “We are pleased to report second-quarter results exceeding our expectations, with sequential improvement in comparable US prescription volume and retail sales.

“During these unprecedented times of global uncertainty, Walgreens Boots Alliance is on the front lines of combating the Covid-19 pandemic. Our number-one priority is to continue to provide essential services, products and information at this critical moment of need, demonstrating our unwavering commitment to our customers and patients, and to our people.”

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