Boots UK owner WBA sees sales drop in Q1

Walgreens Boots Alliance has released its financial results for the first quarter ending 30 November 2023, revealing a 1.5% decrease in sales to £27.8 billion ($33.4 billion). Sales rose 1.1% on a constant currency basis.

The company reported a net loss of $3.7 billion, compared to a net income of $3.6 billion in the same quarter last year.

Net cash provided by operating activities totalled $493 million, with operating cash flow negatively impacted by increased inventory build for the US and UK holiday season.

The international segment reported a 10.8% drop in sales to £4.3 billion ($5.2 billion). However, sales increased 4.6% on a constant currency basis, with Boots UK sales growing 4.3% in the first quarter.

Gross profit decreased 13%, but increased 2.1% on a constant currency basis. This reflects higher UK retail sales growth, partially offset by lower demand for COVID-19 related services in the UK and the gross margin impact of NHS pharmacy funding.

Boots UK retail sales increased 8.7%, whilst pharmacy sales decreased 0.9%. This was attributed to a lower demand for COVID-19 services compared to same quarter last year.

Online sales at Boots UK accounted for 18% of total retail sales in Q1, compared to 9% pre-pandemic. In November 2022, Boots.com reached almost 23% of total sales, including the retailer's "biggest ever" single day of digital sales on Black Friday.

Looking ahead, WBA has raised its full-year sales guidance to £111.1-114.5 billion ($133.5-$137.5 billion), reflecting acquisitions, refreshed currency rates and first quarter sales ahead of expectations.

Rosalind Brewer, CEO of WBA, said: "WBA delivered a solid start to the fiscal year, as we continue to accelerate our transformation to a consumer-centric healthcare company.

"Our core retail pharmacy businesses in both the US and UK remain resilient in challenging operating environments. Execution across segments reinforces our confidence in achieving full-year guidance, and our strategic actions are creating long-term shareholder value."