Walgreens August Sales Increase 6.0 Percent

Main Category: Pharmacy / Pharmacist
Article Date: 05 Sep 2008 - 3:00 PDT

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Walgreens (NYSE:WAG)(NASDAQ:WAG) had August sales of $4,903,100,000, an increase of 6.0 percent from $4,625,540,000 for the same month in 2007. Sales in comparable stores (those open at least a year) rose 0.9 percent, while comparable store front-end sales increased 3.5 percent.

August pharmacy sales increased 4.0 percent, while comparable pharmacy sales decreased 0.5 percent. Comparable pharmacy sales were negatively impacted by 2.4 percentage points due to generic drug introductions in the last 12 months. Total prescriptions filled at comparable stores decreased 2.7 percent.

Calendar day shifts had a significant negative impact on the month, as pharmacy patients fill more prescriptions during the week than on weekends. This year, August had two fewer weekdays compared to August 2007. Calendar shifts negatively impacted total sales by 2.3 percentage points, total comparable store sales by 2.1 percentage points, comparable pharmacy sales by 3.3 percentage points and prescriptions filled in comparable stores by 3.3 percentage points.

In addition to the calendar day shifts, August prescriptions filled were negatively impacted by 0.6 percentage points due to the switch of Zyrtec from prescription to over-the-counter status.

Promotional programs drove solid sales and customer traffic in August. But these aggressive promotions will negatively impact front-end margins in the quarter.

August front-end sales were helped in part by strong sales of consumables and key beauty items. Also, Zyrtec's switch to over-the-counter status benefited front-end sales by 0.5 percentage points.

Pharmacy sales accounted for 65.3 percent of total sales for the month.

Calendar year-to-date sales were $39,502,927,000, an increase of 9.9 percent from $35,944,307,000 in 2007.

Total sales for fiscal 2008, which ended Aug. 31, were $59,043,639,000, up 9.8 percent from $53,762,072,000. Comparable store sales for fiscal 2008 increased 4.0 percent.

Please note that next month, calendar day shifts in September will have a significant positive impact on comparable prescriptions filled. Compared to the 2007 calendar, September 2008 gains a Monday and Tuesday while losing a Saturday and Sunday.

Walgreens opened 92 stores during August, including five relocations.

At Aug. 31, Walgreens operated 6,941 locations in 49 states, the District of Columbia, Puerto Rico and Guam. That includes 6,443 drugstores, 561 more than a year ago. The company also operates worksite health centers, home care facilities and specialty, institutional and mail service pharmacies. Its Take Care Health Systems subsidiary manages 220 convenient care clinics at Walgreens drugstores. Franchisees of Option Care, Inc., a wholly-owned subsidiary of Walgreens, are not included in Walgreens location or store count.

Please note: Monthly sales numbers are preliminary and unaudited. Comparable stores are defined as those drugstore locations open for at least 12 consecutive months without closure for seven or more consecutive days and without a major remodel or a natural disaster in the past 12 months. Relocated and acquired stores are not included as comparable stores for the first 12 months after the relocation or acquisition.

http://www.walgreens.com