Comparable-store sales growth at Walgreen Co. picked up in February as the drug chain saw gains in both the front end and pharmacy. The company said, however, that the nation's rough winter weather shaved comp-store growth in the second quarter.


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Walgreens' same-store sales climb in February

March 5th, 2014

DEERFIELD, Ill. – Comparable-store sales growth at Walgreen Co. picked up in February as the drug chain saw gains in both the front end and pharmacy. The company said, however, that the nation's rough winter weather shaved comp-store growth in the second quarter.

Walgreens said Wednesday that same-store sales rose 4.5% year over year for February, up from a 2.9% increase in January. February comp-store sales results were negatively impacted by 0.9 percentage point from introductions of new generic drugs, which carry lower price points but higher margins, and by 0.4 percentage point from a lower incidence of flu, the company noted.

In the front end, same-store sales were up 2% in February. Basket size grew 2.7%, though customer traffic in comparable stores dipped 0.7%.

Comparable pharmacy sales for February climbed 6.1%. Walgreens said comparable pharmacy sales were negatively impacted by 1.4 percentage points from new generics but got a lift of 0.1 percentage point from more flu shots in February versus last year. The lower incidence of flu had a negative impact of 0.7 percentage point on pharmacy results for the month.

Same-store prescription count increased by 2.2% in February, reflecting a positive impact of 0.1 percentage point from more flu shots in the month versus a year ago and a negative impact of 1.0 percentage point from the lower incidence of flu, Walgreens said.

Season to date, flu shots administered at pharmacies and clinics totaled 7.7 million, compared with almost 7 million a year earlier.

Overall February sales came in at $6.05 billion, up 5% from $5.76 billion a year before. Revenue gained 3% in the front end and 6.7% in the pharmacy. For the month, pharmacy sales represented 62.9% of total revenue, Walgreens said.

For the fiscal 2014 second quarter ended Feb. 28, total sales rose 5.2% year over year to $19.61 billion from $18.65 billion. Same-store sales in the quarter advanced 4.5%, including increases of 2% in the front end and 6.1% in the pharmacy. Prescriptions filled at comparable stores grew 2.4%.

Walgreens estimated that, in the second quarter, severe winter weather negatively impacted same-store front-end sales by 0.6 percentage point and script count at comparable stores by 0.8 percentage point. The company noted that it also incurred incremental selling, general and administrative expenses during the quarter from the severe weather.

Calendar 2014 sales through Feb. 28 totaled $12.43 billion, a gain of 4.2% from $11.93 billion in the prior-year period. Fiscal 2014 first-half sales were $37.95 billion, up 5.5% from $35.96 billion a year earlier.

Walgreens said that in February it opened eight drug stores, including five relocations. As of Feb. 28, the retailer operated 8,209 drug stores, 138 more than a year ago, including 60 net stores acquired over the last 12 months.

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