ESI issue, generic introductions continue to be a drag on WAG pharmacy comps

DEERFIELD, Ill. — Walgreens on Thursday posted April sales of $5.8 billion, a decrease of 3.7% as compared with the same month in fiscal year 2011.



The negative impact on comparable-store prescriptions filled due to no longer being part of the Express Scripts pharmacy network was 10.7 percentage points. Prescriptions processed by Express Scripts comprised 12.6% of Walgreens prescriptions in April 2011. April pharmacy sales decreased 6.3%, while comparable-store pharmacy sales decreased 8.9%. Comparable-store pharmacy sales also were negatively impacted by 3.4 percentage points due to generic drug introductions in the last 12 months and by 0.5 percentage points due to lower incidence of cough, cold and flu.



Pharmacy sales accounted for 62.6% of total sales for the month.



Prescriptions filled at comparable stores decreased 7.8% in April. Calendar day shifts in April, which had one additional Sunday and Monday, and one fewer Friday and Saturday, compared with April 2011, positively impacted prescriptions filled in comparable stores by 0.6 percentage points. On a calendar-adjusted basis, prescriptions filled at comparable stores improved for the third consecutive month, including a 0.9 percentage-point improvement in April compared with March.



“We’ve seen month-to-month improvement in comparable prescriptions filled on a calendar adjusted basis each of the last three months, while our front-end business reflects our continued focus on a more relevant product mix, supported by a new advertising circular strategy that launched in February with continued pricing and promotion discipline,” Walgreens EVP and CFO Wade Miquelon said.



Total front-end sales decreased 0.5%, compared with the same month in 2011, while comparable-store front-end sales decreased 2.2%. Customer traffic in comparable stores decreased 3% while basket size increased 0.8%.



For the combined March/April period that includes the Easter holiday season, comparable store front-end sales decreased by 0.5%, while customer traffic in comparable stores decreased 2.3% and basket size increased 1.8%.



Sales in comparable stores decreased by 6.4%. The effect of calendar day shifts positively impacted total comparable sales by 0.4 percentage points.



Sales for the combined months of March and April 2012 decreased 4% from the same two months in 2011. Comparable store sales for the March/April period decreased 6.7%.



Calendar year-to-date sales were $23.5 billion, a decrease of 2.2% from the same period in 2011.



Walgreens opened seven stores during April, including one relocation, and acquired two stores.