Walgreen’s September sales rise, top estimates
By TOM MURPHY | AP Business Writer October 3, 2013 2:02PM
Walgreen Co.’s revenue from established stores climbed 7.4 percent last month, or higher than Wall Street expected, thanks in part to more prescriptions and flu shots and a calendar shift.
The Deerfield company said Thursday that pharmacy revenue from stores open at least a year jumped 10.2 percent, while revenue from the front end, or rest of the store, rose 2.9 percent.
Analysts had forecast 7 percent growth in total revenue from established stores, and they expected pharmacy and front-end sales to rise 9.4 percent and 2.5 percent, respectively, according to Thomson Reuters.
Revenue from stores open at least a year is a key indicator of a retailer’s health, because it excludes the potentially distorting impact of recently opened or closed stores.
The nation’s largest drugstore chain said prescriptions filled at its established stores climbed 9.6 percent, helped by an increase in flu shots administered to 1.9 million from 1.6 million last year.
Last month had one additional Monday and one fewer Saturday compared to September 2012, which also helped results. Drugstores get more business on weekdays, when customers are more likely to see a doctor and fill a prescription, than they are during the weekend.
Walgreen’s revenue was hurt last year by a business split with the nation’s largest pharmacy benefits manager, Express Scripts Holding Co., and that has helped comparisons with the company’s performance in 2013.
Express Scripts runs prescription drug plans for employers, insurers and other customers, handling prescriptions for millions of people. Walgreen did not fill prescriptions for Express Scripts for most of 2012 after a contract between the two companies expired. That meant many Walgreen customers migrated to other drugstores.
Walgreen said earlier this week that it earned $657 million, or 69 cents per share, in its fiscal fourth quarter. That represented an 86 percent jump from last year’s quarter, largely due to an inventory-related gain and Walgreen’s acquisition in 2012 of a stake in European health and beauty retailer Alliance Boots.
Revenue climbed 5 percent to $17.94 billion in the quarter.
Walgreen also said Thursday that it has started a collaboration with a Chicago-based company, GoHealth, to provide information to customers considering the new health insurance marketplaces that have opened as part of the health care overhaul.
Health insurance exchanges that will help people find coverage that they can pay for with income-based tax credits opened across the country on Tuesday. Drugstore chains like Walgreen are expected to benefit from these exchanges and the overhaul because it will give them more customers with insurance coverage to help cover their bills.
Walgreen’s shares fell 47 cents to $56.06 in midday trading after hitting an all-time high of $57.41 earlier in the session. Walgreen shares have set several new all-time high prices since September, and the stock is up more than 50 percent so far this year.