Walgreens Boots Alliance has reported a strong first-quarter performance, surpassing expectations and prompting an upgrade in its full-year earnings guidance. Both its US and UK operations showed positive results, with the Boots chain showing a strong recovery.

During the first quarter, earnings per share from continuing operations improved significantly to $4.13, compared to a loss of $0.45 in the same period last year. Sales from continuing operations also increased by 7.8% to $33.9 billion, or 7.6% on a constant currency basis. Operating income from continuing operations reached $1.3 billion, and net earnings stood at $3.6 billion, far exceeding the loss of $391 million recorded in the previous year’s quarter.

The company highlighted the exceptional performance of its business segments, with Boots’ comparable retail sales surging by 16.3% and its US retail operations experiencing a 10.6% increase. As a result, Walgreens has revised its full-year adjusted EPS guidance to reflect low-single-digit growth, compared to the previously anticipated flat growth.

Walgreens’ international segment recorded total sales of $5.8 billion in the first quarter, a remarkable increase of 35.8% from the previous year. This growth was driven by a favorable currency impact of 1.6% and a 34.2% increase on a constant currency basis. The formation of the company’s wholesale joint venture in Germany contributed to higher sales. Excluding this benefit, international segment sales on a constant currency basis rose by 8.6%, indicating the ongoing recovery in the UK market following the easing of Covid-19 restrictions in July.

Boots UK experienced a surge in comparable retail sales due to improved footfall and strong online operations. Although footfall remains below pre-pandemic levels, Boots.com saw digital sales almost double compared to the equivalent period before Covid-19. Gross profit increased by 21.9%, reflecting the robust growth in the UK and the inclusion of a full quarter of results from the German wholesale joint venture.

In contrast, Walgreens’ larger US operations saw a modest sales increase of 3.2% to $28 billion in the first quarter compared to the previous year. This growth was hindered by a decline in the AllianceRx Walgreens Prime business. However, comparable sales in the US increased by 7.9%, and retail sales rose by 10.1%. Excluding tobacco and e-cigarettes, comparable retail sales increased by 11.7%, indicating overall growth across all categories, especially in beauty and personal care. Gross profit for the US unit increased by 12.6% compared to the previous year’s quarter.

Buoyed by the strong first-quarter performance and positive momentum, Walgreens Boots Alliance is optimistic about the future. The company’s recovery in the UK market, coupled with its solid performance in the US, positions it well for the remainder of the year. With an upgraded earnings guidance and a commitment to meeting customer needs, Walgreens is confident in its ability to drive growth and deliver value to its shareholders.

For more information, visit:
– Walgreens Boots Alliance (https://www.walgreensbootsalliance.com/)
– Boots UK (https://www.boots.com/)