Introductions of lower-priced generic drugs contributed to a decline in comparable-store sales at Walgreen Co. in February.


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February same-store sales dip at Walgreens

March 5th, 2013

DEERFIELD, Ill. – Introductions of lower-priced generic drugs contributed to a decline in comparable-store sales at Walgreen Co. in February.

Walgreens said Tuesday that comp-store sales edged down 0.6% in February, with new generics negatively impacting results by 3.7 percentage points.

The decrease came after the drug chain had ended a year of monthly same-store sales declines with a 3.7% gain in January.

Walgreens noted that all same-store results for last month compare the first 28 days in February 2012 with the 28 days in February 2013.

In the front end, comp-store sales dipped 1.4% in February. Customer traffic in comparable stores fell 4.9%, but basket size grew 3.5%.

Comparable pharmacy sales were flat in February and reflect a negative impact of 6 percentage points from new generics. Pharmacy sales represented 61.9% of total sales for the month.

The prescription count at comparable stores rose 6.5% for February, according to Walgreens, which said same-store prescriptions filled got a lift of 0.1 percentage point from a higher incidence of flu versus a year ago. Flu shots, however, had no impact on comp-store sales, the company noted.

Walgreens added that the percentage of former Express Scripts customers returning to its pharmacies continued to rise in February on a flu-adjusted basis.

Overall revenue for February was down 2.2% to $5.75 billion from $5.88 billion a year earlier, when total sales included an extra day from leap year. Excluding the leap day from a year ago, February 2013 sales increased 1.5%, Walgreens said.

Total front-end sales fell 3.1% year over year in February but were flat when excluding February 2012's leap day. February pharmacy sales declined 2.1%, yet they were up 2% not counting last year's leap day. 

Season to date, flu shots administered at pharmacies and clinics came in at nearly 7 million, compared with 5.5 million a year earlier. Walgreens reported that enrollments for its Balance Rewards loyalty program, launched in September, totaled almost 60 million through February.

For the fiscal 2013 second quarter, overall revenue dipped 0.1% to $18.63 billion. In the first half of fiscal 2013, sales were down 2.3% to $35.95 billion. Calendar year-to-date sales were $11.91 billion, up 2.2% from the prior-year period.

Walgreens said it opened 11 stores in February, including five relocations, and closed one stores.

As of Feb. 28, Walgreens operated 8,071 drug stores, 231 more than a year ago, including 102 net stores acquired over the last 12 months.

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