Tuesday, January 25, 2022

Boots’ parent company posts strong US profits but struggles in UK

Boots’ parent company have recorded strong sales in its fourth quarter, with net earnings rising 20.3 per cent to £950 million in the three months to August 31.

The US-based company Walgreens Boots Alliance, which owns the UK‘s Boots stores, posted strong overall results for the period, with a 2.5 per cent increase in sales to £23.3 billion.

However, the UK arm of its business held back overall profits posting a decline in like for like sales of 0.8 per cent, although the UK pharmacy division posted a rise of 0.6 per cent.

READ MORE: Boots presses ahead with plans to cull 500 HQ jobs

Its US division fared much better, reporting a 3.2 per cent rise in like-for-like sales and overall sales in the region up four per cent to £16.9 billion (USD).

This is attributed to a merger with Rite Aid in the US, which is due to be finalised in early 2017.

Chief executive Stefano Pessina said Walgreens Boots Alliance had “continued to make good progress in putting in place the building blocks for the future growth of the business” during its fourth quarter.

READ MORE: Sainsbury’s recruits former Boots MD as retail director

US-based retail analysts Conlumino managing director of Neil Saunders commented: “Given that Walgreens is still in the process of driving synergy savings from the Boots Alliance merger, we believe it will generate further profit uplifts well into the next fiscal year, even against a more challenging growth backdrop.

“It is inevitable, however, that the returns from cost savings and the streamlining of the business will diminish over time. And given that the prospects for a recovery in sterling look slim, the company will need to look to its domestic operation to drive future growth.”

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