Walgreens Boots Alliance has better Q3 as Boots recovery starts

By

Sandra Halliday

Published
Jul 2, 2021

Boots owner Walgreens Boots Alliance said its Q3 results exceeded expectations and it raised its full-year guidance to around 10% growth in earnings per share (EPS).

The company said sales from continuing operations rose 12.1% to $34 billion in the quarter, or a rise of 10.4% currency-neutral. And its EPS on that basis rose to $1.27, compared with a loss of $2.05 in the year-ago quarter. The strength was helped both by operations in the US and improvements abroad.

Operating income from continuing operations was $1.1 billion, compared with a loss of $1.7 billion in the year-ago quarter, primarily due to $2 billion non-cash impairment charges in the year-ago quarter related to goodwill and intangible assets in Boots UK.

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Adjusted operating income from continuing operations increased 82.9% to $1.5 billion. The increase reflects “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”.

Its UK ops have been troubled in recent years. But this time, Boots UK comparable retail sales increased 38.7% 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”. The Boots webstore “continued to perform strongly”, with sales growth of 42.3% compared with the year-ago quarter.

CEO Rosalind Brewer said: “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. 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.