Drugstore chain Walgreen Co. (WAG: Quote), called Walgreens, on Friday reported a decline in total sales and comparable store sales for the month of July, as results continued to be hurt by an increase in generic drug introductions and the company's exit from the Express Scripts Holding Co. (ESRX) pharmacy network.
Walgreens' total sales for July declined 3.7 percent to $5.59 billion from $5.81 billion in the prior-year period. Comparable store sales decreased 7 percent in the month.
While the effect of generic drug introductions in the last 12 months negatively impacted total comparable sales by 4.5 percentage points, calendar day shifts positively impacted total comparable sales by 1.4 percentage points.
Total front-end sales in July decreased 0.8 percent from the same period last year, while comparable store front-end sales decreased 2.4 percent. Customer traffic in comparable stores decreased 3.8 percent while basket size increased 1.4 percent.
Prescriptions filled at comparable stores decreased 5.2 percent, mainly due to Walgreens' exit from the Express Scripts pharmacy network, partly offset by the positive impacts of calendar day shifts and higher incidence of flu.
The negative impact on comparable store prescriptions filled due to no longer being part of the Express Scripts pharmacy network was 10.8 percentage points in the month. Prescriptions processed by Express Scripts comprised 12.7 percent of Walgreens prescriptions in July last year.
Pharmacy sales in July decreased 5 percent, while comparable store pharmacy sales decreased 9.7 percent. Pharmacy sales accounted for 63.7 percent of total sales for the month.
In mid-July, Walgreen and Express Scripts announced a multi-year pharmacy network agreement that settles a dispute between the two companies that was running for months. Walgreens will be back in the Express Scripts system on September 15.
In Friday's regular session, WAG is trading at $35.54, down $0.21 or 0.58 percent on a volume of 2.17 million shares.
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by RTT Staff Writer
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