Key Walgreen revenue metric climbs 3.7 pct. in Jan.
ASSOCIATED PRESS February 5, 2013 10:00AM
Updated: February 5, 2013 11:52AM
Walgreen Co. brought in more revenue from established stores than Wall Street expected last month, as the nation’s largest drugstore chain saw an increase in business due to the flu and its repaired relationship with pharmacy benefits manager Express Scripts Holding Co.
The Deerfield-based company said revenue from stores open at least a year climbed 3.7 percent in January, as a 6.2 percent gain in pharmacy sales was tempered by a slight drop in sales from the front end, or the rest of the store.
Revenue from stores open at least a year is considered a key indicator of retailer health because it leaves out results from locations that have opened or closed in the last year. Walgreen opened nine stores last month, acquired two and closed two locations.
Analysts expected, on average, an overall increase of 1.5 percent, according to Thomson Reuters. They forecast growth of 2.4 percent from the pharmacy and a 0.5 percent drop from the front end, or a slightly larger slip than the 0.4 percent Walgreen registered.
The company runs more than 8,000 drugstores, with locations in all 50 states, the District of Columbia, Puerto Rico and Guam. Prescriptions filled at stores open at least a year climbed 13.6 percent.
Walgreen said a calendar shift in January that resulted in an additional Wednesday and Thursday and one fewer Sunday and Monday compared to last year’s month helped, as did a higher incidence of the flu. Drugstores typically get more business during weekdays when customers are more likely to see a doctor and fill a prescription.
Walgreen has administered 6.9 million flu shots so far this season, compared to about 5.5 million a year earlier.
A contract dispute with pharmacy benefits manager Express Scripts Holding Co. hurt Walgreen’s revenue last year. It didn’t fill prescriptions for Express Scripts, the nation’s largest pharmacy benefits manager, for most of last year, and Express Scripts customers migrated to other drugstores.
The companies resumed doing business in mid-September, and Walgreen said Tuesday that the percentage of Express Scripts customers filling prescriptions at its stores continued to increase last month.
Analysts expect that Walgreen’s monthly sales this year will have an easier comparison with the same month in 2012, when that split hurt business.
Overall, Walgreen’s January revenue climbed more than 6 percent to $6.15 billion.
Walgreen shares climbed 95 cents, or 2.4 percent, to $40.96 in morning trading, and set a 52-week high of $40.97. The drugstore chain’s share price has already climbed more than 10 percent so far this year.