Virus im­pact in U.K. pushes Wal­greens to loss in quar­ter

Chicago Sun-Times - - NATION/WORLD - BY TOM MUR­PHY AP Health Writer

The coronaviru­s pan­demic pushed Wal­greens to a $1.7 bil­lion loss in the most re­cent quar­ter with cus­tomers stay­ing home or lim­it­ing shop­ping to es­sen­tial sup­plies from gro­cery stores.

The drug­store chain said Thurs­day that the rapidly spread­ing virus took a bite of be­tween $700 mil­lion and $750 mil­lion from sales, with much of the dam­age com­ing from out­side the United States.

Wal­greens booked non-cash im­pair­ment charges of $2 bil­lion in the quar­ter due to its Boots UK op­er­at­ing loss and con­tin­ued un­cer­tainty about how long the pan­demic will go on. With­out those charges, Wal­greens posted quar­terly earn­ings of 83 cents per share. Sales grew less than 1%, to $34.63 bil­lion.

An­a­lysts ex­pected a sub­stan­tial hit to prof­its, but the size of the loss ex­ceeded those ex­pec­ta­tions. Shares of Wal­greens Boots Al­liance Inc. fell nearly 8%, close to a new low for the year.

More com­pa­nies of all sizes will be­gin re­leas­ing de­tails about their fi­nan­cial per­for­mances over the past three months as COVID-19 seized economies in Europe, as well as North and South Amer­ica. Wal­green’s quar­ter ended May 31, en­cap­su­lat­ing a three­month pe­riod in which con­sumer ac­tiv­ity came to a screech­ing halt.

Wal­greens fur­loughed more than 16,000 em­ploy­ees at the peak of the pan­demic in the United King­dom. Sales at its Boots stores there dropped nearly 28% on a con­stant cur­rency ba­sis. April foot traf­fic plunged 85%.

While stores re­mained open to pro­vide phar­macy ser­vices, Boots’ prof­itable beauty and fra­grance coun­ters were closed.

The im­pair­ment charges il­lus­trated “a re­mark­able de­te­ri­o­ra­tion in as­set value,” said Neil Saun­ders, man­ag­ing di­rec­tor for Glob­al­Data Re­tail, in a re­search note.

Wal­greens Boots Al­liance Inc., based in Deer­field, Illi­nois, runs more than 9,200 stores in the United States and has more than 18,750 lo­ca­tions in­ter­na­tion­ally.

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