Drugstore chain operator Walgreen Co. (WAG) announced Tuesday morning that its comparable store sales for the month of March rose 1.5% and total sales rose 6.8%. However, comparable store front-end sales decreased 5.6%.
Sales for March totaled $5.46 billion, up 6.8% from $5.11 billion in the same month last year. However, the company noted that sales for the month were hurt by Easter falling in April this year compared to March last year.
At the company's pharmacy counters, sales for the month increased 10.2%, and on a comparable store basis, pharmacy sales increased 5.7%. The company said that comparable pharmacy sales were negatively impacted by 2.8 percentage points due to generic drug introductions in the last 12 months. Pharmacy sales represented 66.6% of total sales for the month.
Total prescriptions filled at comparable stores for the month of March increased 4.9%. Walgreen stated that calendar day shifts had a positive impact on the month, as pharmacy patients fill more prescriptions during the week than on weekends. March 2009 had one more weekday compared to March 2008.
Calendar day shifts positively impacted total comparable store sales by 1.3 percentage points, comparable pharmacy sales by 1.9 percentage points and prescriptions filled in comparable stores by 2.0 percentage points.
Patients filling more 90-day compared to 30-day prescriptions negatively impacted total prescriptions filled at comparable stores by 2.1 percentage points in March. The company added that price increases caused by the federal cigarette excise tax increase caused a 1.0 percentage point gain in comparable sales.
During the month of March, Walgreen opened 69 stores, including 11 relocations. As of March 31, Walgreen operated 7,233 locations in 49 states, the District of Columbia, Puerto Rico and Guam.
Calendar year-to-date sales increased 5.5% to $15.82 billion from $14.99 billion in the year-ago period.
For the first seven months of fiscal 2009, sales grew 6.8% to $36.88 billion from $34.53 billion in the same period of fiscal 2008. Comparable store sales for the period increased 1.5%.
Last week, Walgreen reported a decline in second quarter profit, daunted by charges related to Rewiring for Growth restructuring program, despite a nearly 7% rise in sales. Quarterly comparable store sales grew 1.3%. Net income fell to $640 million or $0.65 per share from $686 million or $0.69 per share in the year-ago quarter. Net sales for the recent quarter advanced 7% to $16.5 billion from $15.4 billion last year.
In January, Walgreen said that it would cut about 1,000 jobs, or around 9% of its corporate and field management workforce through a combination of voluntary and involuntary programs in fiscal 2009, that ends on August 31.
The job cuts, which will reduce overhead, are part of Walgreen's Rewiring for Growth plan that targets $1 billion in annual savings by fiscal 2011. Fifty percent of the benefits are expected to accrue beginning in fiscal 2010, with the full $1 billion in targeted annual savings starting in fiscal 2011, the company noted. Walgreen expects to incur costs of $300 million to $400 million over fiscal years 2009 and 2010 while implementing the Rewiring for Growth plan.
Walgreens had unveiled its Rewiring for Growth strategy in October 2008 to improve overall performance. Key components of the strategy include slowing future store openings to focus on its more than 6,600 existing stores, enhancing the customer experience, extending Walgreens strength in pharmacy, broadening payer relationships, and aligning costs and capabilities to its growth strategy.
The company also noted that it will report sales for the combined months of March and April 2009 next month.
In Thursday's regular trading session, WAG is trading at $27.69, up $1.19 or 4.49% on a volume of 1.22 million shares. In the past 52-week period, the stock has been trading in a range of $21.28 to $38.83.
For comments and feedback: contact email@example.com