Walgreen's 2nd-Quarter Sales Fall 0.1%; February Down 4.3%
By John Kell
Walgreen Co.'s (WAG) same-store sales dropped 4.3% in February as last year's results included an extra day due to
leap year, while the drugstore retailer also reported slightly lower sales for the full fiscal second quarter.
For the quarter ended Feb. 28, Walgreen reported sales totaled $18.63 billion, down 0.1% from the prior year. Analysts
surveyed by Thomson Reuters expected $18.93 billion.
Excluding last February's leap day, overall same-store sales would have declined a more modest 0.6%. Pharmacy sales at
location open more than a year were flat, while prescriptions filled at those stores grew 6.5%. Those figures also
exclude the leap day impact.
Results last year were hurt by a rate contract dispute with pharmacy-benefits manager Express Scripts Holding Co.
(ESRX) that led millions to transfer their prescriptions to rival pharmacies. But since Walgreen and Express Scripts
entered a new multiyear agreement that began in September, millions have returned to the fold.
Meanwhile, February's front-end same-store sales dropped 1.4%, excluding the leap day comparison. Drugstore front-end
sales have been helped by a nasty flu season, bolstering traffic and demand for prescriptions and over-the-counter
But that benefit appeared to ease in February, as Walgreen said the high incidence of the flu only helped lift
prescriptions filled at same-store sales by 0.1 percentage point. Still, Walgreen has administered 7 million flu
vaccines so far this season, far above last year's 5.5 million.
Drugstore-retailer results have been stung by increasing demand for generic drugs, which Walgreen said hurt February's
pharmacy same-store sales by six percentage points. Strong demand for those drugs produce a mixed effect because copycat
drugs carry higher margins than branded products but lower prices, hurting same-store sales.
Walgreen opened 11 stores during February, including five relocations, and closed one.
Walgreen's shares, inactive premarket, closed Monday at $41.77. The stock has gained 13% so far this year, better than
the broader market.
-Write to John Kell at firstname.lastname@example.org
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