Facing tough comparisons with strong flu-related business a year ago, Walgreen Co. saw same-store sales growth in September tail off from the previous month as results were virtually flat.


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Sept. same-store sales come in flat for Walgreens

October 5th, 2010

DEERFIELD, Ill. – Facing tough comparisons with strong flu-related business a year ago, Walgreen Co. saw same-store sales growth in September tail off from the previous month as results were virtually flat.

The drug store chain said Tuesday that comparable-store sales in September (excluding Duane Reade stores) inched up 0.4% year over year, less than the 2.1% gain recorded in August.

September's slight increase continued a string of inconsistent same-store results in recent months for Walgreens, which turned in a 0.4% uptick in July that followed a 2% gain in June and declines of 0.2% in May and April. The company noted that calendar day shifts negatively impacted comparable sales in September by 0.1 percentage point.

In September, front-end same-store sales rose 0.7%. Walgreens said customer traffic in comparable stores fell 1.5%, but basket size increased 2.2%.

Pharmacy same-store sales, meanwhile, edged up 0.3% in September. Walgreens reported that calendar day shifts negatively impacted comparable-pharmacy sales by 0.1 percentage point. Also negatively affecting pharmacy same-store results were generic drug introductions in the last 12 months (by 2.8 percentage points); lower incidence of cough, cold and flu (by 0.8 percentage point); and fewer flu shots (0.7 percentage point), the company said.

Prescriptions filled at comparable stores rose 0.8% in September, including 1.4 percentage points from more patients filling 90-day prescriptions, according to Walgreens. Calendar day shifts negatively impacted prescriptions filled in comparable stores by 0.1 percentage point, and the lower incidence of flu negatively impacted comparable prescriptions filled by 1.5 percentage points. Prescriptions filled at comparable stores also were negatively impacted by 1.6 percentage points because of fewer flu shots.

Flu shots administered at pharmacies and clinics during September totaled approximately 2 million, with nearly 2.25 million flu shots having been administered so far this flu season, the company reported.

"We're pleased with the number of flu shots we've already administered," Kermit Crawford, Walgreens' president of pharmacy services, said in a statement. "Although we faced difficult comparisons for the month as a result of last year's H1N1 pandemic and flu vaccine demand, we already have administered nearly 40% of the approximately 5 million shots we provided in the first quarter of last fiscal year, when we ran out of vaccine in the latter part of the quarter. This year, we are well-stocked with flu shots and are still nearly five months away from the typical peak in flu incidences in the month of February."

Overall, Walgreens turned in September sales of $5.64 billion, up 5.3% from $5.36 billion a year earlier. Duane Reade stores contributed 2.8 percentage points to the total sales increase for the month, the retailer said.

Total front-end sales climbed 8.5% in September, including 5.1 percentage points from Duane Reade. September pharmacy sales gained 4.1%.

Calendar year-to-date sales were $50.36 billion, an increase of 5.7% from $47.63 billion in 2009. Walgreens' fiscal year began Sept. 1, so fiscal year-to-date sales are the same as the monthly sales.

Walgreens said it opened 24 stores during September, including four relocations, and acquired three stores and closed four.

As of Sept. 30, Walgreens operated 7,580 drug stores, 536 more than a year ago, including 284 stores acquired over the last 12 months.

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