Boots profits down 11.5 per cent â€˜due to Covidâ€™
The last financial quarter saw Boots UK hit with a 9.1 per cent drop in retail sales and an 11.5 per cent drop in adjusted gross profit compared to the previous year.
In its January 7 financial report, Boots parent company Walgreens Boots Alliance said that while the global business as a whole exceeded expectations in the financial quarter ending November 30 2020, the slump seen in Boots UK stores during the pandemic has continued with poor year-on-year performance.
“Boots UK market share was lower in all categories except beauty, as the pandemic continued to impact heavily on buying habits and consumers temporarily shifted purchasing to one-stop grocery shopping,” the report said.
“COVID-19 continued to impact footfall, particularly in major high street, train station and airport stores.
“The ongoing recovery in footfall trends in September and October was set back by the re-introduction of stricter restrictions for the month of November.”
WBA said this was partially offset by “the favourable timing of NHS reimbursement,” adding that boots.com “continued to perform very strongly” with sales up 106 per cent compared to the previous year.
Pharmacy sales were up 2.5 per cent, which WBA again attributed to the timing of NHS reimbursement. This “mitigated the impact of lower prescription volume and reduced demand for pharmacy services during the pandemic,” said WBA.
CEO Stefano Pessina said: "Our first quarter results exceeded expectations as we continue to deliver on our strategic priorities. As announced yesterday we have taken a major step forward in our transformation; we are divesting our pharmaceutical wholesale business with plans to use the proceeds to accelerate our investments in healthcare.
“While the business environment remains challenging, we are rising to the occasion with agility and discipline and we are confident in our outlook for adjusted EPS for the fiscal year.
“Our role in the healthcare system has never been more important, as the communities we serve continue to turn to our trusted brands and expert pharmacists.
“I am so proud of our teams and the historic and critical role they are playing to help the world emerge from the pandemic, administering COVID-19 vaccinations to frontline healthcare workers and vulnerable members of our society."