Walgreens Boots Alliance said its fourth-quarter profits dropped 45 percent to $373 million from $677 million a year earlier as the U.K. business, in particular, was hard hit by the coronavirus pandemic, according to a press release on Thursday (Oct. 15). Sales in the fourth quarter, ending Aug. 31, were $34.7 billion, an increase of 2.3 percent from the year-ago quarter.
Highlighting a more positive aspect of the report, Vice Chairman and CEO Stefano Pessina said, “I am pleased to report results that came in at the high end of our expectations as we continue to adapt and transform our business model to changing customer needs.”
Walgreens Boots Alliance is the holding company of the combined Walgreens and Alliance Boots, which operated a more international business than the U.S.-based pharmacy chain.
“Despite uncertainty amid the global COVID-19 pandemic, we are seeing gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business,” Pessina said in the release.
The company said decreases in net earnings were “primarily due to an estimated adverse COVID-19 impact.
In June, retail traffic dropped 56.6 percent in U.K. stores, compared to the same month the previous year. Traffic at shopping centers dropped by 62.3 percent for June.
In July, Walgreens Boots Alliance-owned Boots said it would eliminate 4,000 positions and shutter 48 optician locations.
Looking ahead, Pessina said, “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.”
Walgreens noted, “While 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.” The company added that it anticipated that COVID-19 effects will subside and “recovery plans take hold in key markets” in the second half of the year.
