// Boot’s full-year pre-tax profit down 20% to £398 million
// Operating profit down down 22.3% to £391 million
// Sales slips 0.8% to £6.7 billion
Boots has reported a double-digit slump in full-year profits, which it attributed declining sales and the “highly competitive nature” of the retail industry.
For its fiscal year ending August 31, 2018, the health and beauty retail giant saw pre-tax profits drop 20 per cent year-on-year to £398 million.
Meanwhile, operating profit fell 22.3 per cent to £391 million and sales slipped 0.8 per cent to £6.7 billion during the period.
In the report, Boots’ board of directors stated: “The company’s retail revenue, gross profit and gross profit margin are impacted by, among other things, the highly competitive nature of the health and beauty category.
“In particular, our own and our competitors’ pricing actions, promotional offers and events and the customer’s desire for value and convenience.”
The board added that pharmacy income was hit by “governmental agencies seeking to minimise increases in the costs of healthcare, including pharmaceutical drug reimbursement rates”.
The number of users on Boot’s Advantage Card loyalty scheme was also not immune to challenges, with active users declining by 1.4 per cent to 14.4 million.
During the year, the retailer closed down one net store, ending the period with a store estate of 2485.
The full year results come weeks after Boots’ US-based parent company, Walgreens Boots Alliance, said it would need to reduce and slash costs after the “most difficult” quarter in the company’s history.
This means it would look at poor performing shops to close down across its estate as well as “opportunities for consolidation”.
However, Boots UK managing director Seb James has launched an overhaul of the retailer since taking the reins, including revamping its shops and enhancing its brand portfolio, including partnerships with prolific brands such as Rihanna’s Fenty Beauty.
“There’s no doubt that trading conditions were tough on the high street in 2018; and Boots was not immune to these pressures,” James said.
“However, we’re a very successful business with a very strong balance sheet, we have great colleagues and a much loved brand that’s been part of the UK for 170 years.
“We’ve begun transforming the experience for customers when they shop with us. Our priority is making our stores and online offer more differentiated and personalised.
“We want the best brands at competitive prices and to maximise the point of difference that is the infrastructure that Boots has – our 2500 stores.
“We’ve already updated 24 of our beauty halls and introduced 20 new beauty brands over recent months.”