UK-based retailer Boots has emerged as the standout performer for parent company Walgreens Boots Alliance (WBA), despite mixed results in the first quarter. While adjusted earnings per share saw a decline of 43.1% due to challenges in the US retail market and a higher tax rate, Boots UK stood out with its strong performance.

The total group operating loss for the quarter was $39 million, a significant improvement compared to the $6.2 billion loss in the previous year. Adjusted operating income also dropped by 33% on a constant currency basis to $687 million. However, Q1 sales increased by 10% to reach $36.7 billion, driven by growth in both the US Retail Pharmacy and International segments.

In the US Retail Pharmacy division, Q1 sales rose by 6.4% to $28.9 billion, primarily due to an 8.1% increase in comparable sales. The pharmacy category performed the strongest, while US retail sales fell by 6.1% and comparable retail sales were down 5%. Adjusted operating income for this division decreased by 37.2% to $694 million.

The International segment of the company experienced a 12.4% increase in Q1 sales, reaching $5.8 billion, with an 8% favorable currency impact. On a constant currency basis, sales rose by 4.4%, and Boots UK recorded a growth of 6.2%. International adjusted operating income saw a significant jump from $116 million to $142 million.

Boots UK had an exceptional quarter, with comparable retail sales rising by 9.8%. The company saw growth across all categories and formats, and expanded its total retail market share for the 11th consecutive quarter. The company’s webstore also performed strongly, with sales increasing by 17.5% and accounting for over 19% of total retail sales.

Analysts have praised Boots’ performance, particularly highlighting the impressive results in the beauty and haircare categories. Boots’ focus on price, along with the popularity of its own-brand skincare and healthcare products, contributed to its growth. The success of Boots during the Black Friday period also played a significant role in driving its performance.

Looking ahead, Boots faces competition from Sephora, which plans to open a third store in the UK this year. To compete with Sephora and Space.NK, Boots has launched a new concept store in Battersea, focusing on specialized beauty products. The success of this store will determine its potential expansion in the future.

In conclusion, despite mixed results for Walgreens Boots Alliance, Boots UK has proven to be a shining star within the company. Its impressive quarter, driven by strong sales and a focus on price and promotions, positions it well to capitalize on ongoing consumer trends. However, to stay ahead of competitors in the highly competitive beauty and retail industry, Boots will need to continue innovating.

Useful links:
1. Walgreens Boots Alliance Q1 2021 Results
2. Boots UK Official Website