Generic drug introductions continued to undercut same-store sales results at Walgreen Co. in November.


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Walgreens' November sales impacted by generics

December 5th, 2012

DEERFIELD, Ill. – Generic drug introductions continued to undercut same-store sales results at Walgreen Co. in November.

Walgreens said Wednesday that comparable-store sales fell 6.2% in November, down from a 5.9% decrease in October. Still, both months represent a notable improvement from the June to September period, when the drug chain's comp-store sales declined an average of 9% each month.

The retailer noted that new generic drugs, which carry lower prices but higher profit margins, negatively impacted November same-store sales by 5.7 percentage points — about the same as the 5.8 percentage point impact in October. Calendar day shifts shaved comparable sales by 0.2 percentage point during November.

Front-end sales were down 1.7% on a comp-store basis for November. Though basket size grew 3.2% during the month, customer traffic decreased 4.9%, Walgreens said.

In the pharmacy, same-store sales dropped 8.8% in November, reflecting a 0.3 percentage point negative impact from calendar day shifts. Walgreens said day-fall adjusted (DFA) comparable pharmacy sales were negatively impacted by 9 percentage points from generic drug introductions. 

Prescriptions filled at comparable stores fell by 2.9% in November and by 2.6% on a DFA basis. Walgreens said this year's November had an extra Thursday and Friday and one fewer Tuesday and Wednesday, negatively impacting prescriptions filled in comparable stores by 0.3 percentage point. DFA prescriptions filled at comparable stores were positively impacted by 0.2 percentage point because of a higher incidence of flu in November.

Total November sales came in at $5.85 billion, down 3.9% from $6.09 billion a year earlier. Front-end sales dipped 0.3% for the month, while pharmacy sales declined 4.7%. Walgreens said pharmacy sales represented 63.2% of overall revenue in November.

Calendar year-to-date sales were $63.82 billion, down 3.6%. The company reported that flu shots administered at pharmacies and clinics season-to-date totaled almost 4.6 million, compared with about 5 million a year ago. The Walgreens Balance Rewards loyalty program, launched in September, had more than 38 million registrations through November.

For the fiscal 2013 first quarter ended Nov. 30, sales decreased 4.5% to $17.34 billion year over year. Same-store sales were down 7.7% for the quarter, reflecting declines of 2% in the front end and 10.8% in the pharmacy. Prescriptions filled at comparable stores fell 4.6% and total prescriptions decreased 3% in the first quarter.

Walgreens said that in November it opened 39 stores, including 10 relocations, and closed one store. As of Nov. 30, the chain operated 8,057 drug stores, 246 more than a year ago, including 107 net stores acquired over the last 12 months.

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