Costco Q2 sales up 12 percent
ISSAQUAH, Wash. Costco Wholesale today announced that net sales for the second quarter of fiscal 2008 increased 12% to $16.62 billion, from $14.8 billion during the second quarter of fiscal 2007. Net sales for the first half of fiscal 2008 increased 12% to $32.09 billion, from $28.66 billion during the first half of fiscal 2007.
For the second quarter, Costco’s total comps were up 7%. For the first half of 2008, compas were up 7%. The U.S. comparable sales figure includes, among other things, the effect of recent gasoline price inflation, with the average sales price per gallon of gasoline up 29% year-over-year for the quarter. Excluding this, U.S. comparable sales in the second quarter would have been 3% (instead of the 5% reported).
Net income for the second quarter of fiscal 2008 was $327.9 million, or 74 cents per diluted share, compared to $249.5 million, or 54 cents per diluted share, during the second quarter of fiscal 2007. Net income for the first half of fiscal 2008 was $589.8 million, or $1.33 per diluted share, compared to net income for the first half of fiscal 2007 of $486.4 million, or $1.05 per diluted share.
Walgreens announces positive February numbers
DEERFIELD, Ill. Walgreens announced on Tuesday that February sales rose 14.5 percent as same-store sales climbed 8.3 percent.
Sales for the month totaled $4.93 billion, up 14.5 percent from $4.3 billion in the year-ago period. Same-store sales rose 8.3 percent, while same-store front-end sales increased 8.2 percent.
This year’s results benefited from one extra day because of leap year. Same-store sales for 28 days this year compared with 28 days last year rose 4.2 percent, while comparable front-end sales for 28 days increased 4.6 percent.
Pharmacy sales increased 14.7 percent, while same-store pharmacy sales increased 8.3 percent (4.1 percent for 28 days). According to Walgreens, comparable pharmacy sales were negatively impacted by 4.6 percentage points on a 28-day comparison because of generic drug introductions in the last 12 months. Total prescriptions filled at comparable stores increased 7.4 percent (3.2 percent for 28 days). Pharmacy sales accounted for 64.5 percent of total sales for the month.
The retailer noted that, while more flu cases were reported during February, flu-related prescriptions did not reach the level of a year ago. Also impacting prescriptions was the late January switch of the drug Zyrtec from prescription to non-prescription status. The combined negative impact on February prescriptions filled for flu and Zyrtec was 1.4 percent on a 28-day comparable basis.
CMS expands competitive bidding for DMEPOS to 70 new markets
BALTIMORE —At the beginning of the year, the Centers for Medicare and Medicaid Services named 70 new metropolitan statistical areas that will be part of the second phase of a competitive bidding program designed to help lower Medicare beneficiaries’ out-of-pocket costs and improve their access to certain durable medical equipment, prosthetics, orthotics and supplies.
The list includes several major big-city drug store markets, including Chicago, Las Vegas, Los Angeles and New York, and will bring the total number of MSAs in the competitive bidding program to 80.
The second round of the Medicare DMEPOS Competitive Bidding program also includes eight of the top DMEPOS product categories, including oxygen supplies and equipment, standard power wheel-chairs, scooters and related accessories, complex rehabilitative power wheelchairs and related accessories, enteral nutrients (feeding tubes), equipment and supplies, CPAP devices (usually prescribed to treat sleep apnea) and respiratory-assistance devices, hospital beds and related accessories, negative pressure wound therapy pumps and related supplies and walkers.
DME retailers and suppliers will need to meet quality standards established by CMS and be accredited by one of 10 organizations chosen by Medicare. CMS anticipates beginning the pre-bidding activities of the second phase of the program in spring 2008.
The final deadline for all suppliers to obtain an initial accreditation is Sept. 30, 2009. However, suppliers that want to participate in this second phase of the competitive bidding program will have to be accredited well in advance of that deadline to be awarded a contract with CMS, the agency stated.
“I cannot stress enough the importance for all Part B DMEPOS suppliers to apply for accreditation early, and not wait until Sept. 30, 2009,” cautioned Kerry Weems, CMS acting administrator. “Suppliers considering participating in the second phase of the competitive bidding program should apply for accreditation immediately,” he said.
“Competitive bidding means that Medicare beneficiaries will have access to these products at substantially lower costs,” Weems said. “Since all successful bidders will be required to meet quality standards and be accredited by Medicare, people with Medicare in these 70 new areas can be assured of access, low prices and high quality. Through this accreditation process, our beneficiaries are also provided another layer of protection from fraud.”
Under the competitive bidding program, retailers that wish to offer durable medical equipment—including walkers, automated wheelchairs and other assisted-living devices—and services to people with Medicare will have to submit bids to CMS, indicating the prices at which they are willing to supply these items to beneficiaries.
Currently Medicare—and beneficiaries—pay for items based on a fee schedule that, in general, is based on the average payments Medicare has paid for DMEPOS items in the past. Although the fee schedule is updated annually, CMS believes it is not representative of the true market prices of these items and services. Most beneficiaries pay 20 percent of the total cost for these items and services, and should expect to see savings from this program because when the total cost decreases, beneficiaries’ co-insurance also decreases.
Once the competitive bidding program is fully implemented nationally, it is expected to save beneficiaries and Medicare $1 billion annually, CMS stated.