Pharmacy giant Walgreens Boots Alliance has reported that sales increased by 7.9% to $30.7 billion in the first quarter of its 2018 financial year, due to strong performance in its US retail pharmacy division.
Operating income, however, fell by 8.6% to $1.3 billion, as a result of a loss from the company's equity earnings in AmerisourceBergen. Adjusted operating income increased 4.8% to $1.8 billion.
“I am pleased that we delivered another strong performance in the first quarter, led by continued prescription volume and market share growth in Retail Pharmacy USA," said executive vice chairman and CEO Stefano Pessina.
"At the same time, we continue to position our company for future growth."
In September, Walgreens Boots Alliance secured regulatory approval to buy 1,982 Rite Aid stores in the US for $4.38 billion.
As of the end of December, the company had acquired 357 of these stores, and says that it expects to complete the deal in spring 2018.
Neil Saunders, managing director of GlobalData Retail described this as a "mixed set of results".
"Overall sales are strong, aided by the integration of Rite Aid stores and a robust performance from the US retail pharmacy division," he said.
"This growth was sufficient to make up for the slightly disappointing numbers from the international group, where same-store sales fell by 0.7%."
GlobalData Retail says that it is optimistic about future sales growth at Walgreens, but is concerned about increasing competition.
"We believe that the company has the potential to do a great deal better in retail, and as a first step should find ways of competing more effectively with high-growth beauty retailers," added Saunders.
"Walgreens needs to be more innovative, more experimental, more customer-centric, and much faster in driving change."
© 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.