WBA Q1 2021: sales +5.7%, ‘exceeding expectations’

Date : 07 January 2021

Sabira Habib

Retail Analyst

Walgreens Boots Alliance (WBA) announced first quarter results saying total sales rose by 5.7%, 5.2% on a constant currency basis, to US$36.3 bn. It said its growth had been driven by the performance of its Retail Pharmacy USA and Pharmaceutical Wholesale divisions. Discussing the results, WBA’s chairman and chief executive, Stefano Pessina, said: “Our first quarter results exceeded expectations as we continue to deliver on our strategic priorities.

Performance by division

By division, WBA reported that:

Retail Pharmacy USA:

  • Sales rose 3.9% to US$27.2 bn
  • Comparable store sales increased by 3.7%, with comparable pharmacy sales up by 5.0% and comparable retail sales rising by 0.4%
  • COVID-19 negatively impacted on footfall at stores, while also leading to ‘ weak retail cough, cold and flu sales, lower seasonal flu scripts and reduced new-to-therapy scripts
  • Total retail sales fell by 2.2%, including the impact of the store optimisation programmes
  • Comparable retail sales were impacted by a 13.1% fall in beauty category sales and a 1.3% fall in personal care category sales. However, WBA noted these decreases were ‘partially offset by a 4.1% increase in health and wellness category sales

Retail Pharmacy International:

  • Sales fell by 6.2%, or 8.2% at constant currencies, to US$2.6 bn
  • The International divisions sales were impacted by a 11.5% fall in sales at Boots UK, which was affected by COVID-19 restrictions and changing shopper buying behaviours because of the pandemic
  • At Boots UK, comparable pharmacy sales rose 2.5%, while comparable retail sales fell by 9.1%. The pandemic’s effect on footfall on the UK’s main shopping streets and in high footfall locations like train stations and airports had a strong impact on the brand’s performance. While there was a recovery in September and October, as restrictions were eased, their re-introduction in November led footfall to decrease once more
  • The retailer’s ecommerce site continued to perform very strongly, with sales up 106%
  • WBA noted that Boots UK’s market share ‘was lower in all categories except beauty’ as shoppers favoured one-stop grocery shopping trips over multiple visits to different stores throughout the week

Pharmaceutical Wholesale:

  • Sales rose 17.6%, or by 16.3% on a constant currency basis, to US$7.1 bn
  • Results were boosted by the inclusion of its joint venture in Germany, which was consolidated from November forwards

Outlook for 2021 financial year

Looking at the rest of the year, Pessina said: “As announced yesterday we have taken a major step forward in our transformation; we are divesting our pharmaceutical wholesale business with plans to use the proceeds to accelerate our investments in healthcare.

To read more about WBA’s disposal of its pharmaceutical wholesale business, read our news story.

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