Chemist Warehouse is one of the most recognisable businesses on Australia's streets. It's owned by Sigma Healthcare Ltd (ASX: SIG), which isn't a household name, but I think Sigma is an appealing ASX share to buy.
The country's leading pharmacy business may be best known for Chemist Warehouse, but it also has other elements to the company including Amcal, Discount Drug Stores and a pharmaceutical wholesale business.
However, with Chemist Warehouse making up a significant majority of the company's earnings, I think it's the right place for investors to focus because of three different reasons.
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Excellent performance by the existing store network
When there are many different growth areas of a business to consider, I think it's important to see that the core business is performing strongly for shareholders, which is happening at Sigma Healthcare.
The core Chemist Warehouse network in Australia is doing very well and continues to drive the value of the intrinsic value of the business higher.
In early May, the business gave a trading update which revealed the Australian Chemist Warehouse network delivered total sales growth of 16.7% year-over-year for the period of 1 July 2025 to 30 April 2026. This was mostly powered by like-for-like (LFL) sales growth of 14.4%, which is an excellent rate of growth, in my view, for a large retail business.
Thankfully, the company has tailwinds such as Australia's ageing and growing population. Plus, pharmacies are a huge market, so there is still a lot of market share the company could claim thanks to its scale benefits and low prices.
I expect Chemist Warehouse will be able to expand its Australian network with more stores at a pleasing pace over the rest of this decade.
Growth of the international network
Australia is not the only growth avenue for the business. The ASX share also operates in New Zealand, Ireland, Dubai and online in China.
Its international store network delivered 24.7% total sales growth and LFL sales growth of 14.4% for the period 1 July 2025 to 31 March 2026. I expect the company's store networks in New Zealand and Ireland to steadily expand.
Excitingly, Sigma is also going to enter the UK market thanks to a joint venture agreement with Greenlight Healthcare. Greenlight has 22 stores in and around London – Sigma will acquire a 75% interest in a number of stores, with the other 25% continuing to be held by Greenlight.
Under that joint venture, Sigma will licence the Chemist Warehouse brand and intellectual property, and provide retail support (including ranging, store layout, inventory management and marketing support).
Phase one will rebrand up to five stores initially, with the option for more stores if the first phase is successful.
Improving profit margins
In my view, the ASX share has an exciting future of sales growth ahead, but profit growth could be even better because the company's increasing scale helps profit margins rise. Additional revenue dollars are becoming increasingly profitable in each reporting period.
For example, in the first half of FY26, the company reported that revenue grew by 14.9% to $5.5 billion.
Normalised operating profit (EBIT) grew strongly, rising by 18.7% to $582.9 million – faster than sales growth.
The normalised net profit after tax (NPAT) grew 19.2% to $392 million – faster than the EBIT growth.
It's normally net profit growth that investors value a business on, so the profit growth looks very appealing to me. The company can use this net profit to fund more growth, pay down debt and/or pay rising dividends to shareholders.
Overall, there's a lot to like about this ASX share, though it's not the only name I'd love to have in my portfolio.
