Walgreens Boots Alliance lifts forecast on strong sales

Walgreens Boots Alliance has upgraded its full-year guidance after strong trading at both its US and international businesses as Covid-19 testing and online sales propelled first-quarter revenues higher.

The Illinois-based group said it expected full-year adjusted earnings per share to grow by “mid-single digits” from last year’s $4.91, against a previous forecast of no increase.

Chief executive Rosalind Brewer said on Thursday that first quarter performance had “exceeded expectations” with group sales rising 7.8 per cent to $33.9 billion and operating profit of $1.3 billion against a loss of $535 million in the same quarter last year.

‘Continued rebound’

Walgreens said the increases “reflect strong adjusted gross profit growth across both pharmacy and retail in the US and a continued rebound in international sales and profitability”.

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Same-store retail sales rose 10 per cent in the US – the highest quarterly growth in two decades – and 16 per cent at Boots, the UK pharmacy chain whose future is under review. Covid-19 testing accounted for just below a third of US retail sales growth.

Although shopper numbers at Boots’ stores remain a fifth below pre-Covid levels, online sales have almost doubled compared with pre-pandemic levels and the company reiterated it was taking market share in all sectors.

Ms Brewer joined Walgreens from Starbucks last March after her predecessor Stefano Pessina, whose dealmaking largely created the group in its current form, announced he would become executive chair.

Sharper focus

Under her tenure, the group has signalled a sharper focus on US healthcare. The group has already sold its distribution business to AmerisourceBergen and taken majority stakes in primary care provider VillageMD and speciality pharmacy group Shields.

Brewer said its newly created Walgreens Health division was rolling out doctor-staffed clinics at its drug stores “at pace” and that the company was “in the final stages of welcoming a new leader” for the unit. – Copyright The Financial Times Limited 2022