Chemist Warehouse, now part of Sigma Healthcare after a landmark sharemarket merger, is riding a powerful wave of demand for a newer class of weight-management medicines known as GLP-1s. These drugs, which reduce appetite and help people lose weight, only arrived in large volumes recently but they are already reshaping pharmacy sales across Australia and driving strong investor interest in the sector.
Sigma reports that Chemist Warehouse outlets delivered a like for like sales increase of about 15% for the six months to December 31, with momentum staying high at roughly 14.4% growth in the first seven weeks of the new half year. Even though management notes that sales of GLP-1s are now cycling against last year’s surge, demand remains unusually strong. Overall revenue climbed close to $5.5 billion, up almost 15%, while normalised net profit rose a little over 19% to around $392 million, even as offshore operations in markets such as New Zealand, Dubai, China and Ireland weighed slightly on the result.
Behind the headline numbers, the business appears to be betting that these drugs become long term therapies rather than short term fixes. The company suggests customers usually need to stay on GLP-1 medicines to maintain weight loss, which could lock in recurring sales over many years. At the same time, international moves point to an even larger future market. A major European manufacturer has already introduced a cheaper oral version of a GLP-1 in the United States, and if similar tablets reach Australia at lower prices and possibly gain broader government subsidies under the Pharmaceutical Benefits Scheme for people with severe obesity, usage could expand far beyond the current estimate of more than 400,000 Australians paying up to $700 a month privately.
The merger that brought Chemist Warehouse under Sigma’s umbrella via a roughly $34 billion sharemarket deal has created one of the country’s largest listed retail healthcare groups with close to 1000 stores and a big footprint in discount pharmacy. That scale seems to be reinforcing the growth story, and management notes that expanding the store network and competing aggressively on price are helping sustain momentum. The company also links the popularity of weight-loss drugs to rising sales of beauty and hair-care products, suggesting that as customers slim down and feel better about their appearance they are more willing to spend on complementary items, even as broader cost-of-living pressures and higher interest rates continue to squeeze many household budgets.
Looking ahead, the picture for Chemist Warehouse and Sigma looks promising but complex. The combination of strong domestic pharmacy growth, potential for cheaper oral GLP-1s and possible expansion of government support for obesity treatments seems to be setting up years of elevated demand. However, the sustainability of this boom depends on factors outside the company’s direct control, including regulatory decisions and long term health outcomes from widespread use of these drugs, and also how international investments turn from short term drags into contributors. For now, the company appears to be in a sweet spot where medical innovation, consumer behaviour and retail scale are all pushing in the same direction, although that balance could shift as the market for weight-loss medicines matures.
