Drugstore chain Walgreen Co. (WAG), called Walgreens, Tuesday said its total sales and comparable stores sales declined in the month of May as well as in its third quarter hurt by generic drug introductions as well as no longer being part of the Express Scripts, Inc. pharmacy network.
For the month of May, the company's sales were $5.98 billion, a decrease of 1.6 percent from $6.08 billion for the same month in fiscal 2011. Comparable stores sales decreased 5.8 percent in the month.
While the effect of calendar day shifts positively impacted total comparable sales by 0.8 percentage point, generics impact reduced sales by 2.5 percent and cough, cold and flu impact reduced sales by 0.2 percent.
In May, total front-end sales increased 0.3 percent, while comparable store front-end sales decreased 1 percent. The company noted that customer traffic in comparable stores decreased 2.3 percent while basket size increased 1.3 percent.
Prescriptions filled at comparable stores decreased 7.6 percent in May mainly due to no longer being part of the Express Scripts, Inc. pharmacy network, despite positive impacts of calendar day shifts and higher incidence of flu. Prescriptions processed by Express Scripts comprised 12.7 percent of Walgreens prescriptions in May 2011, the company noted.
In May, pharmacy sales decreased 3.9 percent and comparable store pharmacy sales decreased 8.5 percent due to generic drug introductions, product mix of cough, cold and flu drugs as well as exit from the Express Scripts network. Pharmacy sales accounted for 63.1 percent of total sales for the month.
In the third quarter, total sales were $17.77 billion, down 3.3 percent from last year. Comparable store sales decreased 6.5 percent. The company noted that front-end comparable store sales decreased 0.7 percent and prescriptions filled at comparable stores fell 9 percent. Comparable pharmacy sales also were down 9.8 percent.
Walgreens Executive Vice President and CFO Wade Miquelon said, "Since Jan. 1, our underlying trend for number of prescriptions filled has improved. Looking forward, we expect our number of prescriptions filled to be helped as employers and health plans take a variety of steps ranging from changing prescription benefit managers to changing language in new RFPs to provide continued access to Walgreens and our services."
Walgreen shares closed Monday's regular trading session at $30.51, up $0.58 or 1.94 percent. In pre-market activity, shares declined $0.11 or 0.36% to $30.40.
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