Covid-19 hits Boots UK retail sales in fourth quarter

Persisting challenges due to the Covid-19 pandemic has hit Boots UK by plunging its retail sales by 29.2 per cent during the fourth quarter of its fiscal year that ended on  August 31, parent company Walgreens Boots Alliance said last week.

The pandemic continues to cause notable disruption in all international markets, particularly in the UK, the WBA said in a release.

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Footfall in stores continued to significantly decline due to the virus, particularly in major high streets, train stations and airport locations. Footfall did, however, improve steadily during the June to August this year compared with the third quarter.

Reduced footfall in stores has pushed Boots' online sales which recorded a 155 per cent growth when compared with the year-ago quarter.

Comparable pharmacy sales in Boots UK increased by 0.4 per cent, reflecting favourable timing on NHS reimbursement, which mitigated the impact of lower prescription volumes and reduced demand for pharmacy services during the pandemic.

Gross profit decreased 24.7 per cent compared with the same quarter of the last fiscal year, including a favourable currency impact of 0.7 percent.

Company outlook

The company anticipates a gradual reduction in Covid-19 impacts, the first half results will continue to be negatively impacted when compared with the pre-Covid-19 first half of fiscal 2020.

However, for the second half, the company anticipates strong adjusted EPS growth, as these effects subside and recovery plans take hold in key markets.

Significant investments in fiscal 2021 are expected to accelerate the company's customer-centric approach, with specific focus on transforming omnichannel capabilities and offerings across retail and healthcare.

These investments are expected to contribute to the second-half growth profile.

“While this guidance anticipates a continued gradual reduction in Covid-19 impacts, the evolution of the pandemic remains uncertain. Covid-19 could present both incremental risks as well as opportunities for the company's business,” the pharmacy chain said.

The executive vice chairman and CEO of WBA, Stefano Pessina, said: “Despite uncertainty amid the global Covid-19 pandemic, we are seeing gradual improvement in key US and UK markets and continued strong performance in our wholesale business.

“I'm also encouraged by the accelerating growth in our e-commerce platforms. Now, more than ever, our pharmacy-centered business is at the heart of community healthcare and we are expanding on that role for the future.

“I continue to be inspired by the tireless efforts of our teams as they support and care for our customers, patients and communities, while accelerating progress on our clear set of strategic priorities. Looking ahead, we are projecting adjusted EPS growth in fiscal 2021, as reflected in our new guidance."