Retail in brief | McKesson, Phoenix, Well Pharmacy

Retail in brief | McKesson, Phoenix, Well Pharmacy

27 May 2020 - Deborah Wilkes

McKesson has released financial results, Phoenix has reported results and launched a women’s magazine, and Well Pharmacy is offering a range of healthcare and toiletry products online.

McKesson’s sales get a lift from COVID-19

McKesson reported worldwide sales up by 12% to USD58.5 billion in the three months ended 31 March 2020 amid the COVID-19 pandemic.

The US-based drug distributor said sales by its European Pharmaceutical Solutions Segment, which houses the Lloydspharmacy chain, had risen by 9% on a currency-adjusted basis. Sales as reported were USD7.15 billion, representing a rise of 6% compared to the same period a year earlier.

Segment growth had been driven primarily by the pharmaceutical distribution business, said McKesson, including additional sales as a result of COVID-19.

Adjusted operating profit reported by the segment increased by 239% to USD78 million on a currency-adjusted basis, giving an adjusted operating margin of 1.1%. The company said the rise had been due to “expense rationalisation” and the “lapping of a prior year inventory charge of approximately USD20 million”.

The actual operating profit was USD36 million, giving an operating margin of 0.5%.

Giving guidance for the financial year ending 31 March 2021, McKesson said it expected to achieve sales growth of between 2% and 4%. Sales at the European Pharmaceutical Solutions Segment are expected to be in a range from flat to a 5% decline.

McKesson said it was “not assuming that a second wave of COVID-19 returns, leading to shelter-at-home scenarios precluding patient consumption of healthcare services, supplies and pharmaceutical products”.

The company added that it was “not assuming any systemic customer insolvency events”.

McKesson is assuming that unemployment peaks in the three months ending 30 June 2020 and gradually begins to improve across the remaining quarters of the financial year.

Phoenix reports results and launches magazine

A strong performance in Eastern Europe helped Germany’s Phoenix report revenue up by 5.9% year-on-year to EUR27.3 billion (USD30.0 billion) in the year ended 31 January 2020.

The wholesaler and retailer said its total operating performance – comprising revenue and handling for service charge – had risen by 4.5% to EUR34.5 billion.

Revenue in Germany, which accounts for 33.7% of the company’s total revenue, was up by 3.6% to EUR9.2 billion.

Phoenix has just launched a women’s magazine in around 5,000 pharmacies across Germany as part of a collaboration with the media group Funke.

Called Deine Apotheke or Your Pharmacy, the magazine, which has a circulation of 500,000 copies, is said by Phoenix to be the first women’s magazine in Germany aimed exclusively at pharmacy customers.

Phoenix reported Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) down by 0.2% to EUR470 million in the 12-month period.

Well Pharmacy expands online sales

UK-based Well Pharmacy is now offering a range of healthcare and toiletry products online.

Noting that the COVID-19 pandemic “means not everyone can get to their local pharmacy”, Well said its online shop allowed customers to buy “some essential health products without compromising your safety, or the safety of those around you”.

The online shop offers a range of products including allergy remedies, antibacterial wipes, face masks, pain relievers, and vitamins, minerals and supplements (VMS).

Well Pharmacy, which is part of the Bestway Group, claims to be the UK’s third-largest retail pharmacy chain with around 770 stores.

In the 12 months ended 30 June 2019, Well Pharmacy recorded sales of GBP790 million (USD980 million), representing a rise of 0.9% compared to the same period a year earlier. Profit before tax was GBP6.2 million.

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