Pharmacy giant Walgreens Boots Alliance has reported that sales increased 12.1% to $33 billion in the second quarter of the year, with net earnings up 16.6% to $1.7 billion.
This brings the group's total sales for the year to date to $63.8 billion, representing an increase of 10% compared to the same period last year.
Pharmacy sales in the group's US business were boosted by the acquisition of Rite Aid, and the continued integration of 1,982 of its stores into the Walgreens network.
“Our growth strategy of increasing and consolidating volume, differentiating ourselves through value and quality of service, and controlling costs is bearing fruit across our businesses," said Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance.
"This is reflected in another good set of financial results in which we delivered the highest sales growth in eight quarters, as well as strong cash generation and record US pharmacy market share."
Looking ahead, Walgreens Boots Alliance has raised its 2018 fiscal guidance, as the company anticipates continued sales growth, in part through the Rite Aid acquisition.
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Neil Saunders, managing director of GlobalData Retail, described these as a "good set of results", with a strong performance in Walgreens' pharmacy business.
"The continued integration of stores acquired from Rite Aid flatter the numbers, but as the comparable growth of 5.1% demonstrates, underlying pharmacy volumes are also robust," he added.
However, Saunders also noted that the group's international sales slumped by 2.6% in this quarter, with comparable retail sales down 2.8%, mostly due to poor performance at Boots stores in the UK.
He attributed this to consumer pressure in the UK, but also poor stocking and sales over the critical Christmas trading period.
"As we have noted before, Walgreens remains in a position to boost performance through operational tweaks and the integration of Rite Aid," added Saunders.
"However, we maintain our view it is not paying nearly enough attention to its core retail business. This is both a lost opportunity and, as competition in pharmacy heats up, a forward risk."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
