Boots profits buoyed by pharmacy sales

Boots is set to kick off the largest Winter Flu Jab programme in its history as it announces it will also being helping the NHS to deliver Covid-19 booster vaccinations.
Stores that will offer Covid boosters will be confirmed soon following discussions with the NHS.
// Boots US parent company Walgreens Boots Alliance (WBA) posts £796m operating income
// Adjusted operating income from continuing operations increased 82.9% to £1bn
// WBA third quarter sales from continuing operations increased 12.1% to £24bn

Boots parent company Walgreens Boots Alliance has recorded an operating income from continuing operations of $1.1 billion (£796.7 million) in the third quarter, compared with a loss of $1.7 billion (£1.2 billion) a year ago.

This was primarily due to $2 billion (£1.4 billion) non-cash impairment charges in the year-ago quarter related to goodwill and intangible assets in Boots UK.

Adjusted operating income from continuing operations increased 82.9 per cent on a reported currency basis to $1.5 billion (£1 billion), an increase of 82.4 per cent on a constant currency basis.


READ MORE: Boots launches online doctor service


The increases reflect strong adjusted gross profit growth across both pharmacy and retail in the United States and a rebound in International segment sales and profitability due to less severe Covid-19 restrictions in the UK.

“This quarter’s results demonstrate continued momentum, and while challenges lie ahead, we are in a strong position to grow and innovate our core retail and pharmacy businesses for the future,” WBA chief executive Rosalind Brewer said.

“We are accelerating our investments to advance our operational excellence, including technology innovations that support mass personalisation, pharmacy of the future and the next phase of growth in tech-enabled healthcare.

“These investments are fueled by our Alliance Healthcare divestiture. I remain proud of our team members and the essential role they are playing to help end the pandemic as the communities we serve continue to turn to our trusted brands and expert pharmacists.”

WBA third quarter sales from continuing operations increased 12.1 per cent from the year-ago quarter to $34 billion (£24 billion), an increase of 10.4 per cent on a constant currency basis, reflecting strong growth in the international segment.

Boots UK pharmacists have continued to administer over three million Covid-19 tests in June, the majority in partnership with the NHS, and a growing private test offering with several at home and in-store tests available, in addition to testing partnerships with several major airlines.

International segment sales on a constant currency basis increased 12.1 per cent, reflecting a partial recovery in the UK market as Covid-19 restrictions were eased.

Boots UK comparable pharmacy sales increased 3.7 per cent compared with the year-ago quarter, reflecting stronger pharmacy services and favorable timing of NHS reimbursement, partially offset by lower prescription volume.

Boots UK comparable retail sales increased 38.7 per cent compared with the year-ago quarter.

Footfall on the high street showed early signs of recovery amid a partial easing of strict lockdown measures, though travel locations in airports and train stations continued to face challenges.

Boots online sales continued to perform strongly, with sales growth of 42.3 per cent compared with the year-ago quarter.

Operating income, including a favorable currency impact of 0.1 per cent, was $36 million compared with a loss of $2.2 billion (£1.6 billion), which was primarily a result of the non-cash impairment charges.

Adjusted operating income was $94 million (£68 million), an increase of $222 million (£160 million) on a constant currency basis compared with the year-ago quarter, reflecting less severe UK Covid-19 restrictions, Boots.com performance and cost management actions.

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