Walgreens sales gain in March, but Easter, not Rx, gets the credit
DEERFIELD, Ill. Walgreens saw a healthy but qualified rise in sales for the month of March, as an early Easter season pumped up front-end revenues but the pharmacy side of the business lost steam.
Sales for the month rose 10.6 percent over the same period a year ago, Walgreens reported today. Same-store sales were up a more modest 4.4 percent, despite an 11.3 percent increase in same-store front-end sales.
“The company recorded strong Easter seasonal sales, and front-end sales exceeded expectations for the month despite the slowing economy,” Walgreens noted in a statement.
Despite the gains, Goldman Sachs retail analyst John Heinbockel termed the March results less than stellar, noting that the overall comp-store gains of 4.4 percent were below his prediction of a 6 percent rise. “Walgreens’ March sales were a mixed bag, with the front end exceeding expectations and the pharmacy trailing our estimate,” he noted in a report today.
“Interestingly, seasonal business was stronger than at Christmas, although we attribute this more to the lower-ticket nature of Easter than to any fundamental strengthening in the consumer,” Heinbockel added.
Results at the pharmacy counter reflected an industry-wide slowdown in demand and the ongoing effect of generic drug introductions, which have drained sales of some major, higher-priced brand-name drugs over the past year. Result: March pharmacy sales at Walgreens were up just 6.9 percent, modest by Walgreens standards.
Comp-store pharmacy sales were even worse, edging up a meager 0.8 percent, and total prescriptions filled at stores open more than a year actually decreased 0.1 percent.
“Comparable pharmacy sales were negatively impacted by 4.4 percentage points due to generic drug introductions in the last 12 months,” the company reported. “Prescriptions filled, which have slowed industry-wide since December, continued that trend in March, especially the last two weeks surrounding Easter.”
Walgreens also blamed calendar day shifts for the difficult comparison with last year, saying the change accounted for a negative impact of 1.3 percentage points on both comparable pharmacy sales and numbers.
Growth in prescriptions dispensed at Walgreens counters—as was surely the case for its competitors, as well—was also hampered by the shift in the big-selling allergy medication Zyrtec from prescription to lower-priced OTC status. Walgreens said that change, combined with a slowdown in flu season demand, pared the rate of prescriptions dispensed in March by 1.6 percent.
Walgreens opened 39 stores during the month, including five relocations. It also acquired one store and closed one, ending the month with 6,271 drug stores (including 89 home care division locations, 12 specialty pharmacies and two mail service facilities) in 49 states and Puerto Rico, versus 5,675 a year ago. The company also operates 154 Take Care Health Clinics. Franchisees of Option Care, Inc., a wholly owned subsidiary of Walgreens, are not included in Walgreens store count.
Walgreens continues to push refill service
DEERFIELD , Ill. Walgreens announced that on April 2 it will be offering customers who use inkjet printers free cartridge refills at any of more than 3,000 Walgreens stores across the country. Walgreens is offering customers an opportunity to try out the service for free as it continues its rollout to 4,500 stores with the service by the end of the year. For one day only, customers can bring one empty black or color cartridge to Walgreens photo counters with this service and have it filled at no cost.
Since launching printer cartridge refills in 2006, Walgreens said it has seen a steady increase in demand for the service as more people become aware of the quality and convenience. Prices are about half the cost of an original cartridge—only $10 for black ink and $15 for color – and Walgreens backs each refill with a 100% guarantee.
“In this tight economy, this is a great opportunity for people to save money on costly ink cartridges and do something good for the environment at the same time,” said Walgreens photofinishing general merchandise manager John Sugrue. “Since we launched this service, our customers have kept millions of cartridges out of landfills. And with more convenient locations being added daily, it’s easier than ever for people to keep their printers flowing while being both cost- and environmentally-conscious.”
Jenkins retires from Publix, Crenshaw takes over as chief executive officer
LAKELAND, Fla. Former Publix chief executive officer Charlie Jenkins, Jr., officially retired last week, ceding the role of chief executive officer to Publix president Ed Crenshaw and accepting the position of chairman of the company. Former senior vice president of product business development, Todd Jones, was named president of the company.
All executives have had long careers with Publix.
Jenkins, nephew of Publix founder George W. Jenkins, Jr., began his career in 1969 as the assistant to the vice president of real estate. In 1974, he became vice president of real estate and was elected to serve on the board of directors. He was promoted to executive vice president in 1988. Jenkins became chairman of the executive committee in 1990 and chief operating officer in 2000. He was named chief executive officer in 2001.
Crenshaw, a cousin of Jenkins, began his Publix career in 1974 as a front-service clerk in Lake Wales, Fla. After working in a variety of retail and support positions, he was promoted to director of retail operations for the Lakeland Division in 1984. In 1990, he became vice president of the Lakeland Division and was elected to the board of directors. In 1991, Crenshaw moved to Atlanta to start the Publix Atlanta Division as division vice president. He was promoted to executive vice president of retailing in 1994 and to president in 1996.
Jones began his career in 1980 as a front-service clerk in New Smyrna Beach, Fla. He worked in a variety of store positions before becoming a store manager in 1988. He was promoted to district manager in 1997, regional director in 1999 and vice president of the Jacksonville Division in 2003. In 2005, Jones was promoted to senior vice president of product business development.