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Boots reveals strong growth in sales at Irish outlets

Walgreens Boots Alliance, the parent company of pharmaceutical retailer Boots, said that, excluding the UK, comparable sales for its International Retail Pharmacy units rose by 1.1%, driven by good growth in Ireland.

The group released its trading update for the fiscal year and fourth quarter that ended August 31, 2018, which revealed that comparable pharmacy sales decreased by 3.4% on a constant currency basis, primarily due to lower prescription volume and a decline in UK pharmacy funding.

Overall, the group fell short of analysts’ estimates for quarterly revenue as sales of beauty products and prescription drugs fell at its Boots chain, indicating some early impacts from Brexit.

The company achieved an overall sales increase by 11.3% to $131.5 billion (€113.7 billion). Internationally, its Retail Pharmacy division achieved fourth quarter sales of $2.9 billion (€2.5 billion), a decrease of 1.9% from the same period the previous year. Sales decreased 2.7% on a constant currency basis.

“We are pleased to have delivered double-digit percentage growth in earnings per share while returning $6.8 billion (€5.8 billion) to shareholders through share repurchases and dividends in fiscal 2018,” executive vice chairman and CEO Stefano Pessina said.

“The integration of the acquired Rite Aid stores is on track, and our pharmacy market share in the U.S. increased year-over-year on an annual basis. We are making progress on our partnership strategy both in the U.S. and internationally, including our most recent announcements with LabCorp, Kroger, and Alibaba, which will provide additional opportunities for future growth.”

The group’s profit derived from its USA Retail Pharmacy unit, which achieved fourth quarter sales of $25.5 billion (€22 billion). Pharmacy sales accounted for 73.6% of the division’s sales in the quarter.

The company has introduced guidance of 7% to 12% estimated growth in the fiscal year 2019 adjusted earnings per share, at constant currency rates, however, this guidance is based on current exchange rates as well as the execution of its $10 billion (€86 billion) share repurchase programme.

The US owner of Boots pharmacies in Ireland rated growth in sales in the Republic as “good” but gave no new details about whether it was mulling further expansion to its 86 outlets.

Boots chemists are part of the Retail Pharmacy International division of the US stock market-listed Walgreens Boots Alliance giant.

Across all three divisions, including Retail Pharmacy USA and Pharmacy Wholesale, Walgreens posted a 13% hike in earnings per share, as sales rose 10.9% to $33.4bn in the quarter.

It said integrating the purchase of Rite Aid stores in the US was “on track”.

The shares, which rose 2.5% in the latest session, have risen 8.7% in the past year, valuing the company at $71.7bn (€62.3bn).

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