Despite challenges in the US division, Boots UK recorded its 14th consecutive quarter of sales growth
Walgreens Boots Alliance (WBA), the parent company of high street pharmacy Boots, plans to close 1,200 stores in the United States over the next three years in response to a slowdown in consumer spending and low drug reimbursement rates.
As reported by The Times, the closures are part of a strategy by new CEO Tim Wentworth to restore growth for the group, which runs over 8,700 stores in the US and 2,000 Boots pharmacies in the UK.
Wentworth described the 2025 financial year, which started last month, as a crucial “rebasing year” for the company.
He expressed confidence that, although the turnaround will take time, it will yield significant financial and consumer benefits in the long term.
The announcement of the store closures coincided with the release of the fourth-quarter results, which slightly exceeded Wall Street's lowered estimates.
Walgreens' stock, which has declined by 65 per cent this year and is now trading near 30-year lows, rose by $1.44, or 16 per cent, closing at $10.44 on Wall Street.
WBA began the financial year by reducing its dividend to shareholders and lowering its full-year profit forecast after recording net losses of $5.6 billion in the nine months leading up to May.
In the fourth quarter, the company reported a net loss of $3 billion, a significant increase from the $180 million loss in the same period last year.
This larger loss was mainly due to a $2.3 billion non-cash writedown related to its home care unit, CareCentrix, and investments in China.
Despite the broader challenges the group is facing, its UK arm, Boots, has posted the 14th consecutive quarter of sales growth.
Boots achieved a 6.2 per cent year-on-year increase in comparable retail sales in Q4, with growth across all categories.
This strong performance in the final quarter contributed to a 6.9 per cent year-on-year sales growth for the full year ending 31 August 2024.
In the fourth quarter, both in-store and online sales saw continued growth, with digital sales rising significantly by 18.7per cent year-on-year.
Store performance at Boots was driven by strong sales growth in health and beauty, convenience, and flagship locations.
Pharmacy growth reached 10 per cent year-on-year, contributing to a 4.9 per cent increase for the full year, driven by demand for NHS and private healthcare services, including the Pharmacy First Service with over 150,000 consultations in the quarter.
Seb James, the managing director of Boots UK, said: “have delivered a fourteenth consecutive quarter of market share growth and are seeing positive momentum across the whole business, with healthcare now performing strongly alongside our innovative beauty business.”
James will be stepping down from his role next month and will be succeeded by Anthony Hemmerdinger. He is set to become the CEO at Veonet, a leading European chain of ophthalmology clinics.
“As I prepare to hand the leadership baton over to Anthony, I am confident that I am leaving the business in a very solid position, well set up to continue delivering on its exciting transformation. It has been a privilege to lead this business over the last six years and I’m incredibly proud of our team members for everything they do to make Boots as relevant today as it was 175 years ago,” James said.
However, the troubles in the US division have raised concerns about the future of Boots, which has become one of its high-performing assets.
