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Published
May 22, 2018
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Profits fall at Boots as industry competition intensifies

Published
May 22, 2018

Beauty and pharmacy chain Boots has blamed the “highly competitive nature” of the health and beauty sectors for a dip in profits and sluggish revenue growth for the year to 31 August 2017.


Photo: Boots


According to newly filed accounts, pre-tax profits fell to £498 million from £523 million in 2016, while revenue dropped slightly to £6.83 billion from £6.87 billion during the same 12-month period.

The company sells make-up, skincare and other products from a vast range of brands, from affordable brands such as Maybelline to luxury and niche brands like Bare Minerals, Dior, Chanel and Bumble and Bumble.

The number of stores owned by Boots parent company Walgreens Boots Alliance declined by 23 to 2,486 during the period, and no dividend was paid out in the financial year compared with a total of £219 million in 2016.

Commenting on the performance, the board of directors explained: "The company's retail revenue, gross profit and gross margin are impacted by, among other things, the highly competitive nature of the costs of the health and beauty category. In particular, our own and our competitors' pricing actions, promotional officers and events and our customer's desire for value and convenience.”

Boots has faced increasing competition from beauty players in recent months, particularly online beauty retailers, who can also offer a wide range of products without having to pay expensive store leases.

Boots was acquired by Nasdaq-listed Walgreens Boots Alliance in 2014.

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