Walgreens reports March sales increase of 2.3%

DEERFIELD, Ill. — Walgreens on Wednesday reported March sales of $6.2 billion, an increase of 2.3%. 

March pharmacy sales increased by 0.4%, while comparable store pharmacy sales were down 1.5%. This year's March had one additional Sunday and one fewer Thursday compared with March 2012, Walgreens reported, so pharmacy same-store sales were actually up by 1.9% when adjusted for the calendar day-shift. Calendar day shifts negatively impacted pharmacy sales in comparable stores by 340 basis points. Calendar day-shift adjusted comparable store pharmacy sales were negatively impacted by 480 basis points due to generic drug introductions in the last 12 months. 

Pharmacy sales accounted for 62.2% of Walgreens' total sales for the month.

Prescriptions filled at comparable stores increased by 4% in March and increased 7.4% on a calendar day-shift adjusted basis. In comparison, industry-wide script growth was up 3.1% for the four weeks ended March 16, according to Credit Suisse analyst Ed Kelly citing IMS data. With the flu season past, Kelly noted, the industry "still appears to be seeing relative solid growth." 

Total front-end sales increased 5.4% compared with the same month in fiscal 2012, while comparable store front-end sales increased 4.2%. Front-end sales will have benefited from a March 31 Easter — last year Easter sales fell in April. As a result Walgreens will report combined comparable store sales for March and April with its April sales results. 

Kelly warned that front-end sales boosted by an earlier Easter may help mask underlying concerns, industry wide. "Recent commentary from multiple retailers suggest that consumers remain challenged by macro/fiscal pressures," Kelly wrote in a March 2 note. "We also believe that increased competition and promotions from value players continue to be a head-wind for the drug retail channel."

Customer traffic in comparable stores at Walgreens decreased 1.3% while basket size increased 5.5%.

Overall sales in comparable stores increased by 0.7% in March. Calendar day shifts negatively impacted total comparable sales by 210 basis points, while generic drug introductions in the last 12 months negatively impacted total comparable sales by 300 basis points.

Registrations for Walgreens Balance Rewards loyalty program, which launched in September, totaled more than 64 million through March. 

Walgreens opened 12 stores during March, including four relocations, and closed one.


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