Announcing its latest financial results yesterday (October 14) for the June-August period, Walgreen Boots Alliance reported improved sales for its international segment – which includes Boots UK – which it attributed to the “ongoing recovery in the UK market, where COVID-19 restrictions were lifted on July 19”.
Boots UK’s retail sales also saw a 15% increase compared to the same three-month period last year, due to increased footfall on the UK high street following the ease of lockdown measures. Although footfall is up 35% compared to last year, it still “remains below pre-COVID levels”, Walgreen Boots Alliance noted.
Adjusted gross profit for the international division increased by 32.7% for the June-August period, while adjusted operating income was $140 million (£102m), “up to $129 billion (£94bn) versus the prior year”.
“The UK recovery is very much on track”
Signs of recovery were already being seen earlier this year, when Walgreens Boots Alliance reported a 3.7% rise in Boots UK’s pharmacy sales in the three months to May, compared to the same period the previous year.
Prior to this, the international division of Walgreen Boots Alliance recorded a 13.4% drop in adjusted gross profits for the December-February period compared to the same quarter the year before, C+D reported in March.
And adjusted operating income for the division also took a hit in the three months to February due to “strict COVID-19 restrictions in the UK”.
Since the lifting of COVID-19 restrictions in July, the UK recovery has been “very much on track”, chief financial officer James Kehoe said during the conference call yesterday. He attributed this to “a recovery of footfall, strong commercial execution, and a successful marketing campaign”.
Mr Kehoe noted the significant gains made in Boots’ beauty sector, which grew sales by 24.8% and now accounts for half of the total sales on Boots.com.
Boots.com continued to perform ahead of expectations, with digital sales in the fourth quarter more than doubling compared with pre-COVID-19 levels.
President John Standley said that “Boots online sales were up 85% between March 1, 2020, and March 1, 2021” and accounted for almost a quarter of its total retail sales, with many online transactions happening through the Boots app.
Mr Kehoe said during the call that Walgreen Boots Alliance believes “the UK will be fully recovered from COVID-19 only in 2023”.
“If you want to think about the horizon, it gets back to pre-COVID-19 levels by that time,” he added.
“It’s been a tough journey for them,” compared to the US division’s “very buoyant” fourth quarter, Mr Kehoe continued.
The multiple has also continued its efforts to combat the pandemic, having delivered 3.7 million COVID-19 tests and administering 800,000 vaccines across the UK since January 2021.
Mr Kehoe noted that Boots “will support the NHS to deliver COVID-19 booster vaccinations in 55 of its [branches] in England”.
