THE WHAT? Walgreens Boots Alliance has announced its financial results for the third quarter of fiscal 2020. Sales increased just 0.1 percent to US$34.6 billion, and a cash impairment charge of US$2 billion led to an operating loss of US$1.6 billion, compared to operating income of US$1.2 billion a year ago.
THE DETAILS In the three months ended May 31, 2020, the company suffered an adverse sales impact of some US$700 million to US$750 million thanks to a ‘dramatic’ reduction in footfall in Boots UK stores caused by COVID-19 restrictions and closures. Despite qualifying as an ‘essential retailer’, the company shuttered its premium beauty and fragrance counters, more than 100 stores and virtually all of its 600 opticians across the country.
It came as no surprise, then, that Boots UK sales were down 27.7 percent. In contrast, Retail Pharmacy USA’s comparable sales growth was 3.2 percent, despite store closures
THE WHY? Executive Vice Chairman and CEO Stefano Pessina said, “Prior to the pandemic our financial performance for fiscal 2020 was on track with our expectations. However, this unprecedented global crisis led to a loss in the quarter as stay-at-home orders affected all of our markets. I’m very proud of how all of our teams mobilized and adapted to deliver essential services in our communities across the world. Shopping patterns are evolving more rapidly than ever as consumers further embrace digital options, spurring us to accelerate our ongoing investments in digital transformation and neighborhood health destinations. This includes our two recent announcements: a significant expansion of our primary care clinics collaboration with VillageMD, and our strategic partnership with Microsoft and Adobe to launch a personalized omnichannel healthcare and shopping experience.”