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Express Scripts Separation Hits Walgreens Again In August And Fiscal Year

Friday September 7th, 2012 - 8:45AM


As goes August, so went Walgreens sales in fiscal 2012. Walgreens total front-end sales, including general merchandise such as housewares, increased 0.9% in August compared with the same month in 2011, while comparable store front-end sales decreased 0.6%.

Customer traffic in comparable stores slipped 2.2% while basket size increased 1.6%.

The retailer posted August total sales of $5.85 billion, a decrease of 4.5% from the same month in fiscal 2011.

Prescriptions filled at comparable stores decreased 6.8% in August. Higher incidence of flu positively impacted comparable store prescriptions filled by 0.4 percentage point. Walgreens separated from the Express Scripts, Inc. prescription maintenance service last year due to disagreements about terms, and that development had a negative impact on comparable store prescriptions filled.

August pharmacy sales decreased 7.2%, while comparable store pharmacy sales tumbled 12.4%, factors that would impact customer traffic to the extent that fewer shoppers entered the store to pick up prescription medicine. And, indeed, comparable store pharmacy sales were negatively impacted by Walgreens' Express Scripts separation last year, the company acknowledged. Comparable pharmacy took a hit from the introduction of lower-cost generic drugs over the past 12 months as well.

Pharmacy contribution constituted 64.1% of total sales for the month. Overall sales in comparable stores decreased by 8.2%  in August.

Total sales for the fourth quarter of fiscal 2012, which ended August 31, were $17.08 billion, down 4.9% from last year’s period. Comparable store sales for the fourth quarter of fiscal 2012 decreased 8.7%, while front-end comps slipped fell 1.3%.

Total sales for fiscal 2012 were $71.64 billion, off 0.8% from the year earlier. Comps decreased 3.6% year over year.

Walgreens opened 18 stores during August, including six relocations, and closed two units. As of August 31, Walgreens operated 8,386 locations in all 50 of the United States as well as the District of Columbia, Puerto Rico and Guam. The total includes 7,929 drugstores, 169 more than a year ago, with 42 stores acquired over the last 12 months.