Drugstore chain Walgreens (WAG) announced Monday that comparable store sales, or sales at stores open for one year or more, declined 4.6 percent in January, with total sales, including stores open less than a year, also dropping 2.3 percent.
Meanwhile, comparable store front-end sales were up 1.6 percent, but comparable pharmacy sales plunged 7.9 percent.
The company noted that it anticipated a very challenging month of January on a comparable prescription basis due to its exit from Express Scripts network from this year as well as the much milder cough, cold and flu season been experienced.
"We are pleased with our front-end performance in January and that front-end comparable sales increased year-over-year, demonstrating the value of Walgreens to our customers as we continue to move forward with our strategy to become America's first choice for health and daily living," President and CEO Greg Wasson said in a statement.
The Deerfield, Illinois-based company reported that total sales, including stores open less than a year, decreased 2.3 percent to $5.80 billion for January, from $5.93 billion in the same period of last year.
The company said its total January front-end sales increased 2.7 percent, and comparable store front-end sales were up 2.6 percent. The company also noted that customer traffic in comparable stores edged down 0.6 percent, while basket size increased 2.2 percent.
At the company's pharmacy counters, sales for the month decreased 6.0 percent. The company noted that comparable pharmacy sales drop of 7.9 percent was positively impacted primarily by 1.3 percentage points due to calendar day shifts. However, it was mainly negatively impacted by 10.6 percentage points due to dropping out from Express Scripts network. Pharmacy sales represented 63.6 percent of total sales for the month.
The company revealed that flu shots administered at pharmacies and clinics season-to-date were 5.5 million, compared to 6.3 million during the same period last year.
Total prescriptions filled at comparable stores for the month of January declined 8.6 percent. Walgreens stated that comparable prescriptions filled had a 1.3 percentage point positive impact due to calendar day shifts as January 2012 had one additional Tuesday and one fewer Saturday. Further, lower incidence of flu had a 1.5 percentage points negative impact, and exiting from Express Scripts network had a 10.6 percentage points negative impact.
Walgreens said its drive in January to promote one-year memberships in its Prescription Savings Club resulted in a record signup of more than 700,000 new memberships. During the month of January, Walgreens opened 14 stores, including two relocations.
For the calendar year-to-date period of five months, the company reported total sales of $30.94 billion, up 2.9 percent from $30.08 billion in the year-ago period.
Looking ahead, Walgreens expects its relationship with large and small employers, health systems, physician groups and other PBMs to grow, as its moves past the impact from this year's weak flu season. The company anticipates an improvement in the coming months in the number of comparable prescriptions filled relative to January's result.
However, the company said it now expects prescriptions filled in fiscal 2012 to be around the low end of its previously announced range of 97 to 99 percent of prescriptions filled in fiscal 2011.
WAG closed Thursday's regular trading session at $33.53, up $0.21 on a volume of 10.11 million shares, higher than the three-month average volume of 8.93 million shares. In the past 52-week period, the stock has been trading in a range of $30.34 to $47.11.
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