Boots

The owner of Boots, Walgreens Boots Alliance, has warned of store closures, amid falling sales in the “most difficult quarter” since its merger.

Walgreens Boots Alliance slashed its full-year earnings forecast in its second results on Wednesday, blaming weaker sales both in the UK and US.

Despite a 9.8% rise in prescription sales at its US stores across the period, gross profit at the group fell 3.2%.

Meanwhile, UK like-for-like sales slid 2.3%, amid a backdrop of weak consumer confidence.

The group said it now expects profit to be flat for the full year, revising earlier guidance of 7% to 12% growth.

As a result of the disappointing second quarter, Walgreens Boots Alliance said it consider reviewing underperforming sites as it looks to streamline costs.

Executive Vice Chairman and CEO Stefano Pessina commented on the results: “The market challenges and macro trends we have been discussing for some time accelerated, resulting in the most difficult quarter we have had since the formation of Walgreens Boots Alliance.

She continued: “During the quarter, we saw significant reimbursement pressure, compounded by lower generic deflation, as well as continued consumer market challenges in the U.S. and UK. While we had begun initiatives to address these trends, our response was not rapid enough given market conditions, resulting in a disappointing quarter that did not meet our expectations. As a result, we are now expecting roughly flat adjusted EPS growth for fiscal 2019.”

Boots has 2,485 stores across the UK, employing about 56,000 staff.

Shares in Walgreens Boots Alliance (NASDAQ:WBA) are down -12.81% as of 12:40PM (GMT).

 

 

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Nicole covers emerging global economic and political events for The UK Investor Magazine. Her focus is particularly upon company news and political developments in Europe and the US.