Duane Reade reports increased sales, narrows quarterly loss
NEW YORK Duane Reade announced on Thursday that fourth-quarter sales rose more than 4 percent as it narrowed its quarterly loss thanks to improvements in gross margin and selling, general and administrative expenses.
Total net sales for the quarter increased 4.1 percent to $431.6 million compared with last year. Net retail store sales, which exclude pharmacy resale activity, increased 4.4 percent to $414.6 million. Total same-store sales for the quarter rose 5.7 percent, while pharmacy same-store sales increased 3.3 percent. Front-end same-store sales increased 7.5 percent thanks to strong sales of food and beverages, OTC products and health and beauty care items.
Gross margin during the quarter increased to 30.7 percent from 30.1 percent in the year-ago period, driven by higher selling margins resulting from improvements in front-end merchandising, increased pharmacy margins related to higher rates of generic utilization and a reduced LIFO charge. As a percentage of sales, SG&A expenses declined 25.4 percent from 26 percent in the prior year due to improved leveraging of costs on higher sales, reduced ad costs and lower legal and professional fees.
Net loss for the quarter totaled $15.1 million compared with a net loss of $29.7 million in the year-ago period.
For the full year, total net sales were $1.687 billion, up 6.4 percent compared with the year-ago period. Net retail store sales for the year rose 6.1 percent to $1.623 billion. Total same-store sales increased 7.4 percent, while front-end same-store sales increased 8.6 percent. Pharmacy same-store sales rose 5.9 percent.
Net loss, which included a prior-year recognition of one-time labor contingency income, for the year was $87.8 million compared with a net loss of $79.4 million in 2006. Excluding the prior year’s labor contingency income, net loss improved by $9.6 million due to improved gross margin and better leveraging of operating expenses.
“We are optimistic and excited about our prospects for growth and continued positive momentum in 2008. Our strong and talented team has solidly positioned our company to maximize the opportunities that lay ahead of us as New York’s leading drug store,” stated David D’Arezzo, interim chief executive officer and chief marketing officer. “We remain confident in our ability to maintain and expand our leadership position in the years to come.”
For 2008, the company, which currently has 242 stores, expects to open 15 new locations. Net loss is expected to range between $58.3 million and $63.3 million, with net retail store sales, excluding pharmacy resale activity, expected to range between $1.720 billion and $1.736 billion.
CDC study finds 1-in-4 teen girls has an STD; recommends screening, vaccination, education
CHICAGO An alarming number of teenage girls has a sexually transmitted disease, according to a recent study by the Centers for Disease Control and Prevention: slightly more than one-quarter.
The overall rate of STDs among the 838 girls in the study was 26 percent, translating to more than 3 million nationwide, the Associated Press reported.
About half of the girls surveyed admitted to having sex—though their definitions of what that consisted of varied—and among those, the number with an STD climbed to 40 percent.
The new study, by CDC researcher Sara Forhan, actually relied on slightly older data from nationally representative records on girls ages 14 to 19 who participated in a 2003-04 government health survey. The director of the CDC’s division of STD prevention, John Douglas, has stated that the data still likely reflect current prevalence rates.
The teens were tested for human papillomavirus, chlamydia, trichomoniasis and genital herpes. HPV prevalence was significantly higher than the others, accounting for 18 percent of the STD cases, with the others all reporting a rate below 5 percent.
Many doctors feel that the prevalence of STDs is due, in part, to the government’s abstinence-only policy in sex education. Teens, they say, are simply not getting the information that would enable them to protect against these diseases.
The CDC recommends that teens get routinely screened and educated about prevention. Kevin Fenton, the CDC’s Director for the National Center for HIV/AIDS, Viral Hepatitis, STD and TB Prevention said given the dangers of some STDs, “screening, vaccination and other prevention strategies for sexually active women are among our highest public health priorities.”
U.S. prescription sales grew modestly to $286.5 billion in 2007
NORWALK, Conn. IMS Health today released its annual U.S. Pharmaceutical Market Performance Review, reporting that overall sales growth in the U.S. prescription market moderated to 3.8 percent in 2007, compared with growth of more than 8 percent in 2006.
Total U.S. prescription sales reached $286.5 billion, with slower sales growth resulting from loss of exclusivity of branded medicines, fewer new product approvals, the leveling of year-over-year growth from the Medicare Part D program and the impact of safety issues, IMS Health reported. The 2006 growth was an anomaly, in other words, due to the implementation of Medicare Part D, but 2007’s slowing growth rate is a continued trend that began in 2001, according to the report
Compared with a 4.6 percent growth in 2006, total U.S. dispensed prescription volume grew at a 2.8 percent pace. The top five therapeutic categories—antidepressants, lipid regulators, codeine & combination pain medications, ace inhibitors and beta blockers—continued to lead the market in terms of prescription utilization.
“In 2007, the U.S. pharmaceutical market experienced its lowest growth rate since 1961,” said IMS’s Murray Aitken, senior vice president of Healthcare Insight. “Last year, we saw a continuing shift away from primary care classes to biotech and specialist-driven therapies, which grew at a 9 percent and 10 percent pace, respectively. Among the leading therapy classes, oncology drugs continued their rapid growth, at 14 percent—the result of innovative new medicines, expanded indications and accelerated uptake of products to fill unmet needs.”
Sales of lipid regulators declined by 15.4 percent year-over-year, though continued to represent the largest therapy class in the nation, with prescription sales of $18.4 billion. Proton pump inhibitors ranked second, with prescription sales of $14.1 billion and growth of 2.8 percent. Antipsychotics replaced antidepressants as the third-largest therapeutic class in 2007, with prescription sales growth of 12.1 percent to $13.1 billion.
The IMS report forecasts compound annual pharmaceutical sales growth through 2012 of 3 percent to 6 percent, based on predicted loss of exclusivity in major therapy areas, new specialist-driven products, greater levels of therapeutic substitution, and greater awareness and focus on safety issues.
“We will see additional lower-cost treatment options for many patients, while new and innovative therapies are delivered to specific patient groups, such as those suffering with cancer. Safety issues will be closely monitored and are likely to bring added caution to the market over the next several years,” said Aitken.