WAG’s June sales beat analyst expectations
DEERFIELD, Ill. — Walgreens’ stock was trading up 30 cents to $43.03 on the New York Stock Exchange mid-morning on Wednesday thanks to favorable same-store sales growth of 4.8% for the month of June versus an analyst consensus estimate of 2.8%.
Much of that sales growth can be traced to the front-end, as Walgreens posted 4.7% increased sales across comparable stores against tougher year-over-year comparisons. Before Walgreens reported June sales, Credit Suisse analyst Ed Kelly projected a 3% same-store sales increase driven by re-inflation and improving customer traffic. “We believe sales will continue to improve throughout the year [across the drug channel], as drug stores pass through product cost inflation without a meaningful impact to volume,” Kelly said.
Overall, Walgreens reported June sales of $6 billion, up 6.8% as compared with last year. Total front-end sales were up 6.4%. In addition to the 4.7% front-end same-store sales lift, customer traffic in comparable stores increased 1.3% and basket size increased 3.4%.
Prescriptions filled at comparable stores were up 5% across the Walgreens network in June. Calendar day shifts positively impacted prescriptions filled in comparable stores by 30 basis points, Walgreens reported. Kelly pointed to higher pricing on branded drugs and a lull in the generic wave as additional driving factors of prescription growth. “Underlying script growth has remained lackluster since flu activity decelerated in April,” he wrote in a research note released last week. “Total script growth, as reported by IMS, averaged just 1% in the last four weeks ended June 17 v. 2%-3% earlier in the year.”
June pharmacy sales across Walgreens increased 6.2%, while comparable pharmacy sales increased 4.9%. Pharmacy sales accounted for 65.6% of total sales for the month.
Walgreens opened 15 stores during June, including two relocations, acquired seven stores and closed one for a net increase of 19 stores in the month.
NRF: ‘Extremely disappointed’ in swipe-fee regulations set
WASHINGTON — The National Retail Federation said last week that it was disappointed in the final debit card swipe-fee regulations set by the Federal Reserve.
Under the new rule, the current debit card swipe-fee rate of 1% to 2% of each transaction will be replaced with a flat fee of not more than 21 cents per transaction for the nation’s largest banks — substantially higher than the flat fee of up to 12 cents the Federal Reserve originally proposed in December 2010.
“American consumers suffered a major loss today,” NRF president and CEO Matthew Shay said. “We are extremely disappointed that the Federal Reserve chose to be influenced by special interests and ignored the will of Congress and American consumers. While the rate will provide modest relief, it does not go far enough.”
Shay added that the Federal Reserve did not follow through to the full extent of swipe-fee reform, but that “we take some comfort in knowing that we were able to shine a light on these deceptive practices and bring some relief to merchants and their customers.”
Even though the new regulations set last week are a step forward for the industry, NRF has argued that debit card transactions should be honored at or close to face value since debit cards function as plastic checks that draw from the same bank accounts as paper checks.
Last week’s action comes three weeks after the Senate rejected an amendment that would have delayed swipe-fee reform by at least a year and required the Federal Reserve to write regulations more in favor of the banks. The amendment was defeated after NRF launched a nationwide lobbying, grassroots and media campaign.
Thomas Dowd steps in as GNC’s chief merchandising officer
PITTSBURGH — Thomas Dowd has been named GNC EVP, chief merchandising officer and general manager, the company announced in a Securities and Exchange Commission filing Friday.
Dowd has served as EVP store operations and development since April 2007.
The move follows the announcement in June that Beth Kaplan would be stepping down from her role as GNC president and chief merchandising officer. Following that announcement, GNC CEO Joe Fortunato reassumed his role of president.
As previously reported by Drug Store News, GNC last month appointed Amy Lane to serve as a member of its board of directors in place of Kaplan. Lane, who serves as director for off-price home and fashion apparel conglomerate TJX Cos., also will serve on the board’s audit committee.