Mar 28, 2023
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WBA reports rising sales, says Boots strengthened in Q2

Mar 28, 2023

With beauty and health retail giant Boots potentially up for sale again, its owner has released new figures showing its strength in the financial second quarter, the three months to the end of February.

Boots No7

Total Boots retail sales rose 16% year on year to mark eight quarters of consecutive growth, driven by sales of beauty products that helped the company to a strong Christmas trading period. Sales for the five weeks to 31 December rose 17.4%.

Meanwhile, parent company Walgreen Boots Alliance said Q2 earnings per share (EPS) fell 20.3% to $0.81 even though sales rose 3.3% year-on-year, to $34.9 billion.

Sales in the first six months of fiscal 2023 were $68.2 billion, an increase of 0.9%. The operating loss was $6 billion compared to operating income of $2.5 billion in the year-ago period. This reflects a $6.8 billion pre-tax charge for opioid-related claims and litigation.

Looking back at Boots specifically, during December, skincare enjoyed “three consecutive weeks of record sales” as demand for own-brand No7 plus labels such as La Roche-Posay and CeraVe spiked.

The company also saw footfall rising 16% during the quarter, and web traffic was strong too with Boots.com continuing to perform well, accounting for over 15% of retail sales in the quarter compared to approximately 9% pre-pandemic.

UK and Ireland MD Sebastian James said that “more people are choosing to shop with Boots, largely thanks to our focus on value and our market-leading beauty offer. This is reflected in our strong retail sales performance and our continuing market share growth, particularly in terms of Christmas trading”.

GlobalData retail analyst Tash Van Boxel said of this: “While Boots reaped the benefits of consumers splashing out over Christmas, the health & beauty specialist’s stellar performance was not limited to the festive period. Larger basket sizes [and] premium beauty and skincare drove sales growth during the period. 

“To maintain this momentum going into H2, Boots must continue to promote its value range, which has allowed shoppers to trade down rather than switching away to value retailers, such as Aldi and Savers, as well as its higher-price-point beauty products, ensuring consumers can trade up for a treat. Given its positive performance, Boots UK is well positioned to attract a buyer if the rumours are true that it is soon to be put up for sale again.”

She added that “Boots must remain wary of its rivals, particularly given that key competitor Sephora has now opened its first UK store (in 18 years) in Westfield London. But, given Boots’ recent revamp of its own Westfield store, it is evident that the retailer is well aware of the threat and is likely hoping to decrease the risk of losing customers to Sephora through the re-opening of its new and improved store format”.

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