) disclosed that its customers enrolled under the Balance Rewards
loyalty program in future, can earn more points by participating
in activities that enhance physical fitness. Loyalty members can
redeem these points for worthwhile rewards from the company.
Until recently, members earned 10 points for a mile walk. Now
members can earn points for other health-related activities
besides earning 20 points for that mile walk. With this
Steps with Balance Rewards
, Walgreens can also track the healthy behavior of customers.
Walgreens launched its customer Balance Rewards loyalty program
in Sep 2012, which has recorded more than 60 million
registrations to date. As per management, it is generating a
majority of sales.
In the second quarter of fiscal 2013, the customer traffic in
comparable stores declined 5.2% year over year. The latest
initiative is likely to improve customer traffic at the company's
comparable stores. This should provide some comfort as Walgreens
continues to face a sluggish sales environment.
The company' sales in the most recent quarter missed the Zacks
Consensus Estimate for the fourth time in a row. This was despite
the last quarter being the first full quarter to include the
benefit from the return of
Nonetheless, things are looking up for Walgreens. Its long-term
) should improve its global pharmaceutical supply chain. In
addition, we are encouraged to note Walgreens' timely progress
for delivery of first-year synergy targets following its Alliance
Boots deal. If the recent turn of events is any indication, the
company is leaving no stone unturned to return to sales growth
trajectory. Walgreens' return to growth, though not robust, is
In light of these facts, the stock continued its bullish run
edging past resistance levels. Shares of Walgreens inched towards
a 52-week high of $47.87 on Apr 2. The closing price of $47.32
reflects a solid year-to-date return of 27.8%.
However, with two successive earnings misses until the most
recent quarter and a glaring lack of clarity in estimate revision
trends for the ongoing fiscal, the stock carries a Zacks Rank #3
(Hold). On the other hand, drug retailer
Rite Aid Corporation
) carries a Zacks Rank #1 (Strong Buy) and warrants a look.
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