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Walgreens Focused on Growing Health Unit

Walgreens
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The second-largest drugstore retailer in the US says it plans to open 100 new Walgreens health corner locations this year, after closing two acquisitions last quarter, and now finishing third. While no new details have been provided regarding the sale of the Boots franchise in the UK, the sharply improved international results will certainly make the deal easier and more profitable.

With a tailwind of managing 56 million vaccines and 22 million COVID tests, the CEO of Walgreens Boots Alliance said Thursday (January 6) that the company is pressing ahead with plans to accelerate and deepen its transition to healthcare in its quest to become the “pharmacy of the future.”

The comments from CEO Rosalind Brewer come as the drugstore chain reported an 88% increase in its domestic multi-channel sales last quarter as well as a sharp rebound in its international business, which has come under increased scrutiny since reports in early December said the company may spin . From UK-based Boots, which she associated with in 2012.

Breuer told analysts and investors on the company’s first-quarter earnings call, pointing to other acquisitions such as increasing its 100% ownership stake in Alliance RX Walgreens Prime and the German wholesale business as better indicators of its new direction.

Although no new details were provided about the specific fate of Boots, a strong rebound in its quarterly sales and results will make selling the unit smoother or holding it easier to justify at a time when the retailer is reinventing itself to be more of a healthcare provider.

“We are looking to add a new Health Corner store every week on average in 2022 as we refocus our portfolio and improve capital allocation,” Brewer said.

Bridging the healthcare gaps

Brewer spoke about the company’s stated goal of further developing its healthcare offerings within a base of nearly 9,000 US stores and the hundreds of others it has added through the acquisition of VillageMD, Shields and a pending CareCentrix deal that it expects to close in the third quarter.

Brewer said Health Corners’ new strategy, backed by early results from 10 new California locations, shows how Walgreens will be able to “close care gaps” by offering more convenient services and locations.

“It has increased confidence that when implemented at scale, this innovative consumer-centric strategy will drive significant growth in value creation in the future,” said Brewer, noting that the company’s increased investment in healthcare was a clear step toward its vision to be a leader in Reimagining local health care and wellbeing.

We connect the pillars of our physical health [stores] With our digital app and other unique supplement assets to reduce costs, improve health outcomes and equity.

moving

Regardless of acquisitions and divestitures, Walgreens shares have enjoyed a whopping 25% gain over the past five weeks leading to its recent earnings results. On that front, the Deerfield, Illinois, retailer said its total revenue rose 7.8% to $33.9 billion for the three months ended November 30, with comparable retail sales in the U.S. increasing 10.6%, and its British retail unit generating revenue by 7%. 16%. recovery.

Other operating benefits for the quarter included completing 3.6 million same-day pickup orders, which Brewer said averaged about $30 per order compared to $20 for in-store purchases. Meanwhile, more than 7 million new users were added to my Walgreens membership during the quarter, bringing the total to 92.4 million.

In addition to test and vaccine results, Walgreens said US retail sales, excluding tobacco and e-cigarettes, rose 11.7%, with huge revenue growth of nearly 25% in health and wellness, followed by a 16% increase in beauty and nearly 12%. Gains in personal care.

While its international unit accounts for only a fifth of total revenue, the non-US business saw a sharp rebound compared to last year, with sales up 36% to $5.8 billion.

Taken together, Walgreens said it was able to raise its full-year forecast to low-digit earnings per share growth, from a previous forecast of flat results.

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