Bayer hires Wendy Diamond for cat health campaign
NEW YORK — Bayer HealthCare has signed a deal with a pet expert in a campaign focused on cat health, the company said Friday.
Bayer’s animal health division announced that it had hired Wendy Diamond and her Russian blue cat, Pasha, to dispel popular myths about cats and promote its flea treatment, Advantage II. Diamond has appeared on television shows such as "Good Morning America" and "The Today Show" as well as in other media outlets.
"When it comes to how well we know our cats, many cat owners are ‘barking up the wrong tree,’" Diamond said. "Pasha and I are thrilled to partner with Advantage II to help put an end to both the misconceptions about cats and the fleas that cause them discomfort. And there is no better time to talk about fleas than the warm weather months, when problems related to flea infestation are at their peak."
Walgreens all systems go for 2013; reports 4Q, annual sales
DEERFIELD, Ill. — Fiscal 2012 now is in Walgreens’ rearview mirror as the company looks ahead toward 2013 with its foot on the accelerator. A re-entry into the Express Scripts pharmacy provider network, a new loyalty card and synergies borne out of the Alliance Boots partnership will all help fuel Walgreens’ health-and-wellness engine.
Walgreens stock was up slightly within the half-hour of the call to approximately $36.70 per share. WAG had closed Thursday at $36.52 and opened Friday morning at $36.27.
"With this [year] now behind us, we are focused on the many opportunities ahead," Greg Wasson, Walgreens president and CEO, told analysts Friday morning. "We now have the structure, talent and strategies in place to drive … long-term performance."
Wasson pointed to the pharmacy operator’s just-launched loyalty card, the expansion of its Well Experience stores to 350 locations to date and its Alliance Boots strategic partnership as key components that will help drive those results going foward.
Specifically, the Alliance Boots partnership creates a supply chain engine with a "scope and scale without equal," Wasson said. "We believe replicating this combination will be difficult, if not impossible, given this tremendous first-mover advantage." Walgreens and Alliance Boots have already "begun the real work," Wasson said. "We’re already sharing best practices in areas such as loyalty and e-commerce."
Other strong tailwinds include Walgreens’ expansion of its private label line and the infusion of "fresh" into many front-ends across urban locations, Wasson said. However, Walgreens did not provide fiscal 2013 guidance on the call.
"Earnings momentum should shift positively at Walgreens in 2013, as some [Express Scripts] customers return, the company cycles easy flu and front-end comparisons, the generic wave accelerates and synergies/accretion from [Alliance Boots] kick-in," wrote Credit Suisse research analyst Ed Kelly in a note published Thursday. "While there are headwinds, such as a [Medco Health Solutions] pricing reset, loyalty card/ESRX related costs, and an overall challenging competitive/consumer environment, we still see solid growth in earnings." Kelly has a "neutral" rating on Walgreens stock.
But being absent from the Express Scripts network for almost nine months took its toll. Compared with the prior year periods, the negative impact of not being part of the Express Scripts pharmacy provider network was 6 cents per diluted share in this year’s fourth quarter and 21 cents per diluted share for the entire fiscal year, which matched the company’s previously stated estimate, Walgreens noted.
There are three buckets of Express Scripts customers, Wasson said. "First, there are people who will come back right away. They are our most loyal customers," he said, noting that many of those consumers have already made their way back to Walgreens. "The second bucket are people who will need a little convincing," Wasson continued, and Walgreens will be targeting those customers with an increase in marketing. "It really comes down to three things — convenience, the relationship and service. We think we win in all three of those," Wasson said. "We think bucket one is the largest."
"We’ve got a lot of history being out of networks in the past," commented Wade Miquelon, Walgreens EVP, CFO and president international, told analysts. Miquelon expressed confidence that a significant number will come back because "they came to us in the first place," he said, suggesting that there was something those customers liked about the location, the format and the service the received from Walgreens. Excepting Tricare, which did not fold Walgreens back into its Express Scripts network, Walgreens is hoping to recapture "almost all percentage wise," Miquelon said. Analysts on the call surmised there would be an accretive uptick in prescriptions in October as the first bucket comes back into the fold, and then another significant uptick in January as patients receive literature on their 2013 health plans.
The promotion of Balance Rewards also should help woo those customers. Since its inception at the top of September online and in-store Sept. 16, has signed 12 million members to date. "Overall, we believe this will be the largest, most powerful, most successful loyalty program in retail," Wasson said.
The final bucket of Express Scripts patients will be the most difficult to convert back to Walgreens, Wasson said. Wasson and Miquelon declined to define the size of each of those buckets.
Fourth quarter sales decreased 5% from the prior-year quarter to $17.1 billion. Total same-store sales were down 8.7%. Prescription sales, which accounted for 63.3% of sales in the quarter, decreased 8.1%, while prescription sales in comparable stores decreased 12.8%. The company filled 188 million prescriptions, a decrease of 6.9% over last year’s fourth quarter. Prescriptions filled in comparable stores decreased 8% in the quarter.
Front-end comparable store sales decreased 1.3% in the fourth quarter, customer traffic in comparable stores decreased 3.2% and basket size increased 1.9%, while total sales in comparable stores decreased 8.7%.
For fiscal year 2012, sales were down 0.8% from the prior year to $71.6 billion. Adjusted net earnings totaled $2.6 billion, or $2.93 per diluted share, compared with $2.7 billion, or $2.93 per diluted share in fiscal 2011.
Brand-to-generic prescription drug conversions impacted sales by $1.4 billion or 1.9 percentage points in the fiscal year. Walgreens filled 784 million prescriptions in the year, representing a retail prescription market share of 18.7%.
In fiscal 2012, Walgreens added a net gain of 169 new drug stores, including 43 acquisitions. The company’s Well Experience store format was expanded to nearly 350 locations, including flagship stores in New York City, Chicago, Las Vegas and Puerto Rico. As of Aug. 31, Walgreens operated 8,385 locations in all 50 states, the District of Columbia, Puerto Rico and Guam, including 7,930 drug stores and hospital onsite pharmacies nationwide. Walgreens also operates worksite health and wellness centers, infusion and respiratory service facilities, specialty pharmacies and mail service facilities. Its Take Care Health Systems subsidiary manages more than 700 in-store convenient care clinics and worksite health and wellness centers.
Contigo launches new water bottle for kids
CHICAGO — Contigo has introduced a new spill-proof water bottle for kids.
The new, BPA-free Striker water bottle is designed for children ages 3 years and older and features an AutoSpout lid, which includes a kid-friendly push-to-drink button for easy one-handed drinking on the go. The bottle also features a specially designed spill-proof valve — the first AutoSpout water bottle with this feature — which helps kids transition from sippy cups without the mess.
Contigo’s new Striker water bottle is available in a 14-oz. size and carries a suggested retail price of $9.99.