Boots recovery boosts WBA results, Walgreens also strong
Walgreens Boots Alliance is upbeat as its first quarter beat expectations and it upgraded its full-year earnings guidance aided both by its US ops and a recovery in its UK unit.
The owner of the key UK Boots chain and the giant US Walgreens business said Q1 earnings per share (EPS) from continuing operations reached $4.13, compared with a loss of $0.45 in the year-ago quarter.
Sales from continuing operations increased 7.8% to $33.9 billion, rising 7.6% on a constant currency basis. And operating income from continuing operations increased to $1.3 billion. Net earnings on that basis were $3.6 billion, compared to a loss of $391 million in the year-ago quarter.
The results “surpassed expectations across business segments” and it said Boots’ comparable retail sales surged 16.3% while those at its US retail ops rose 10.6%.
It’s now increasing its full-year adjusted EPS guidance to low-single-digit growth, from flat previously, to reflect that first quarter performance and “continued positive momentum”.
The company said its international segment saw Q1 sales of $5.8 billion in total, an impressive increase of 35.8% from the year-ago quarter, including a favourable currency impact of 1.6%. Sales increased 34.2% on a constant currency basis, including higher sales associated with the formation of company's wholesale joint venture in Germany. Excluding this benefit, International segment sales on a constant currency basis rose 8.6%, “reflecting the ongoing recovery in the UK market, following the lifting of Covid-19 restrictions in July”.
Boots UK comparable retail sales surged, as mentioned earlier. That came as footfall improved, although traffic remains below pre-Covid-19 levels. However, online ops appear to be taking up the slack and Boots.com continued to perform well, with digital sales in the first quarter almost doubling compared to the equivalent pre-Covid quarter.
Gross profit increased 21.9% on the year, including a favourable currency impact of 3.7%. The rise reflected that strong UK growth, and higher gross profit associated with the inclusion of a full quarter of results from the German wholesale JV.
The much larger US ops saw Q1 sales of $28 billion, an increase of 3.2% on the year, but held back by a decline in the AllianceRx Walgreens Prime business. Comparable sales increased 7.9% from the year-ago quarter.
Retail sales increased 10.1% and excluding tobacco and e-cigarettes, comparable retail sales increased 11.7%, reflecting broad-based growth across all categories. Beauty and personal care increased 11.6%.
Gross profit at the unit rose 12.6% compared with the year-ago quarter.
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