Here are three areas driving sales growth at Walgreens

A lady walks previous Boots No7 cosmetics displayed on the market at a Walgreens Boots Alliance Inc. retailer in New York.Michael Nagle | Bloomberg | Getty PhotosAs individuals emerge from their houses once more, Walgreens Boots Alliance stated they are ordering passport photographs, refreshing make-up baggage and rolling up their sleeves for Covid-19 pictures.Those three sales drivers contributed to higher-than-expected earnings within the fiscal third quarter. The drugstore chain raised its outlook for the 12 months, saying it has extra confidence after seeing rebounding sales and the uptake of Covid vaccines.Global Chief Financial Officer James Kehoe stated it has administered greater than 25 million pictures — with about 17 million given within the three-month interval.The drugstore chain’s shares fell Thursday on buyers’ issues that these vaccines supplied a short-term carry to sales. The firm is in the course of a turnaround led by its new CEO Roz Brewer, the previous chief working officer of Starbucks, and a few suppose the corporate’s transformation will take time.But Kehoe stated he sees encouraging indicators for the months forward such because the return of retailer site visitors and discretionary spending.During the peak of the pandemic, front-of-store sales had particularly plummeted at Walgreens as prospects purchased on a regular basis objects like shampoo and toothpaste on-line or at the grocery retailer as they consolidated purchasing journeys. Customers largely omitted classes like make-up and chilly and flu treatment as they wore masks.That has began to alter, Kehoe stated. Sales within the photograph division rose 54% and sales of magnificence merchandise rose about 15% within the U.S. in contrast with the year-ago quarter. On its web site and in shops, Walgreens sells a wide range of photo-related objects, together with passport photographs and wall decor — two areas catching prospects’ consideration as they spruce up their houses and make journey plans once more.Within the photograph division, Walgreens noticed power notably in passport photographs and in prints, based on an organization spokesperson.Across the ocean, Walgreens additionally noticed a resurgence of magnificence. Boots, its drugstore chain within the United Kingdom, carries greater than 500 magnificence manufacturers — together with 34 new manufacturers launched this fiscal 12 months. Its magnificence sales have been up 85% year-over-year, in comparison with a time of strict lockdowns within the U.Ok.Kehoe stated the variety of prospects visiting shops is growing in all geographic markets, from rural areas to cities, with essentially the most important enhance in retailer transactions in city areas. In the U.S., sales transactions grew by practically 7% and basket dimension fell by about 5% as extra prospects got here again to shops, however didn’t purchase like they did in the course of the stock-up section of the worldwide well being disaster.More of Walgreens’ sales are happening on-line, too, as the corporate noticed a 95% year-over-year enhance in digitally initiated retail sales in the course of the third quarter. Walgreens stated it has accomplished about 6 million curbside pickup and drive-thru orders — new choices for purchasing that it added in the course of the pandemic.John Boylan, a senior fairness analyst who covers client staples for Edward Jones, stated a resurgence in spending in departments like magnificence and photograph bodes nicely for the pharmacy chain — as long as it will probably stick with it.”Those are usually pretty worthwhile objects inside the retailer, and likewise are usually site visitors drivers as nicely,” he stated. “It type of helps Walgreens be extra of a vacation spot level.”However, Neil Saunders, managing director of GlobalKnowledge, stated Walgreens is holding itself again with outlets and shows that “lack aptitude” and emphasize comfort as an alternative of inspiration. He famous its comparable sales grew solely by 1.7% in contrast with the year-ago interval or by 2.6% when excluding tobacco — a small quantity contemplating different retailers are cashing in on a nationwide spending spree.As Walgreens provides health-care companies like main care clinics, Saunders stated it ought to overhaul the entrance of its shops to make them extra eye-catching, too.”Alongside the opposite issues it’s engaged on, Walgreens must reimagine its retail proposition and reframe the expertise to 1 that resonates with fashionable consumers,” he stated in an electronic mail. “Any failure to do because of this Walgreens will proceed to battle in retail and can miss out on many growth alternatives.”