Boots has endured a slump in second-quarter sales as parent company Walgreens blamed the reintroduction of lockdown restrictions for the “set back” in its revenue recovery.
Like-for-like retail sales fell 17.9% at Walgreens Boots Alliance’s UK division during the three months to the end of February.
Boots pharmacy sales increased 3.2% during the same period.
Walgreens said Boots UK’s performance was impacted by the ongoing Covid-19 crisis, which “continued to impact footfall, particularly in major high streets and in train stations and airports”.
It added that the footfall recovery observed during the autumn was “set back” by the reintroduction of social distancing restrictions.
Boots’ online sales more than doubled compared to the same period last year, booming 105%.
The retailer continued to gain market share in beauty but lost out in other categories as shoppers favoured “one-stop” grocery shops during the pandemic.
Gross profit at Boots UK dropped 9.2% year on year as a result of the testing trading conditions.
Despite the challenges in the UK, parent company Walgreens Boots Alliance raised profit guidance for its 2021 fiscal year. It now expects “mid-to-high single-digit growth” in earnings per share, having previously expected low single-digit growth.
It said the new forecast reflected a first-half performance that came in “above expectations” and it was also expecting “strong growth” in the second half of the year.
Walgreens delivered an operating income of $832m during its second quarter, down 24.4% year on year. Total sales climbed 4.6% to $32.8bn.
Chief executive Rosalind Brewer, who replaced Stefano Pessina at the helm last month, said: “Overall, we have achieved a good financial quarter with results well ahead of expectations, despite significant impacts from Covid-19, and we have raised our full-year EPS guidance.
“I am optimistic about our ability to drive sustainable, long-term value for our shareholders while acknowledging that there is still work to be done to stabilise the base business.
“I will continue to review closely all our initiatives, strategies and opportunities to capitalise fully on the incredible potential in front of us. Our team will move swiftly and decisively to best serve the needs of our patients, customers and communities around the world, at this critical time and beyond.”
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