Walgreens Boots Alliance announced sales growth of 11.3% to $131.5bn for the year ending 31st August 2018. Performance was boosted by its acquisition of Rite Aid. Performance across markets and divisions was mixed.
- Sales up 11.3% YOY to $131.5bn
- Operating income up 15.4% YOY to $6.4bn
US: positive pharmacy performance, retail sales in decline for Q4
The US Retail Pharmacy business continued to drive growth in Q4 generating $25.5 billion worth of sales, an increase of 14.4% for the same period last year.
Overall, like-for-like sales were up 0.3%. Volume driven growth in pharmacy contributed to 1.3% pharmacy like-for-like sales. Following the Rite Aid acquisition, pharmacy now accounts for 73.6% of the division’s sales, an increase of 16.7% compared with Q4 2017.
In contrast, retail like-for-likes declined -1.9%. Groceries, general merchandise and personal care contributed to this decline, however beauty, health and wellness were strong performers.
International: weaker performance for Boots UK in Q4
WBA’s international business generated $2.9bn worth of sales in Q4, a decrease of -2.7% on a constant currency basis, compared with the same period last year. Comparable sales in pharmacy and retail both declined year-on-year (-3.4% and -0.9% respectively). Boots in the UK had a tough quarter, highlighting the beauty category performance as particularly challenging, in part offset by strong sales in health & wellness. UK pharmacy sales were impacted by lower prescription volume and a decline in UK pharmacy funding.
However, Thailand and Ireland performed strongly. Excluding the UK, comparable sales grew 1.1%.
Emerging markets contribute to pharmaceutical wholesale growth
Pharmaceutical Wholesale grew by 4.7% on a constant currency basis in Q4, delivering sales of $5.6bn. Emerging markets delivered good growth.
Partnering to drive growth
At the results announcement, Executive Vice Chairman and CEO Stefano Pessina also commented "We are making progress on our partnership strategy both in the U.S. and internationally, including our most recent announcements with LabCorp, Kroger and Alibaba, which will provide additional opportunities for future growth.”
Read more about Walgreen's latest partnerships here.
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Retail Analysis subscribers can find out more about Walgreens Boots Alliance's strategic outlook here.