WBA Walgreens Boots Alliance Inc

By Micah Maidenberg and Renata Geraldo 

Walgreens Boots Alliance Inc. said its overseas business struggled again in its latest quarter as the Covid-19 pandemic cut into customer traffic and prescription demand in the U.K.

The drugstore chain on Thursday said retail sales at its Boots U.K. unit fell more than 29% on a comparable basis, with the pandemic especially reducing consumer visits at the stores on major shopping streets, in train stations and in airports.

The company also said it expects the pandemic to continue to weigh on results into the middle of next year.

"It is realistic to assume continued negative Covid-19 impacts in the first two quarters of the year," Chief Financial Officer James Kehoe said on a call with analysts. The company expects conditions to gradually improve in the second half of the year as people get vaccinated, he said.

Walgreens doesn't expect major new government restrictions or stay-in-place orders tied to the coronavirus during its new fiscal year. The company doesn't make any assumptions about the role it could potentially play in distributing Covid-19 vaccines, executives said on the call. There still could be more localized lockdowns tied to the pandemic, they said.

The Boots U.K. business has emerged as a source of concern for investors and a challenge for the Deerfield, Ill., company, which is primarily tied to the U.S. market. In July, Walgreens said it would cut about 4,000 jobs in the U.K. and recorded $2 billion in impairment charges tied to the Boots business.

Walgreens acquired Boots in 2014 after taking a 45% stake in the company two years earlier. It has been a lucrative business for the U.S. chain, driven by strong sales of upscale beauty and health products. Walgreens' U.S. operations have struggled with smaller revenue for prescription drugs and competition from online retailers.

Walgreens said sales in its retail-pharmacy unit in the U.S. totaled $27 billion in the latest quarter, up 3.6%. Filled prescriptions increased 3.6% on a comparable basis and demand for health, personal-care and personal-protective products rose. Those gains were partially offset by weaker sales for beauty items, the company said.

Online sales rose in the quarter, according to the company. Chief Executive Stefano Pessina, who had previously announced he will step down, said the company's big effort in modernizing will continue with the next CEO.

Overall, sales for its fiscal-fourth quarter that ended Aug. 31 rose to $34.75 billion from $33.95 billion a year earlier. Analysts polled by FactSet predicted $34.37 billion for the latest period.

Walgreens said profit fell to $373 million, or 43 cents a share, from $677 million, or 75 cents a share, the year earlier. After adjustments, the company reported earnings of $1.02 cents a share, better than expectations from analysts.

Shares rose about 3.5% to $37.19 on Thursday morning.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

October 15, 2020 12:21 ET (16:21 GMT)

Walgreens Boots Alliance (NASDAQ:WBA)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024

Walgreens Boots Alliance (NASDAQ:WBA)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024