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Fred’s positive August results reflective of recently implemented improvement initiatives

BY Michael Johnsen

MEMPHIS, Tenn. — Fred's Super Dollar on Thursday reported sales of $147.6 million, up 6%, for the four weeks ended Aug. 30. Comparable-store sales for the month increased 2.3% compared with flat-store sales in the same period last year.
 
Fred's total sales for the year-to-date period increased 1% to $1.1 billion. On a comparable-store basis, year-to-date sales decreased 0.6% versus an increase of 0.5% for the year-earlier period.
 
"We are pleased to report improved sales and traffic for August," stated Bruce Efird, Fred's CEO. "Our results reflected the positive impact of recently implemented initiatives, which were fully in place for the first time in August. As a result, we saw ongoing improvements in virtually all general merchandise departments during August, and our pharmacy department continued to post strong growth in comparable scripts and sales," he said. "Going forward in the third quarter, we will continue to transform Fred's based on the convenience/pharmacy-centric model we recently outlined, a strategy that brings clear advantages to our store operations and customers."
 
Fred's last week outlined a series of initiatives to right its listing ship after reporting a disappointing second quarter, including the shuttering of 60 non-pharmacy stores and a stepped up focus on pharmacy.
 
During the month, Fred's opened three Xpress pharmacy locations.
 
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Walgreens ends fiscal year with 5.8% sales lift to $76.4 billion

BY Michael Johnsen

DEERFIELD, Ill. — Walgreens on Thursday reported August sales of $6.4 billion, an increase of 3.6% from the same month in fiscal 2013. Total sales for fiscal 2014 were $76.4 billion, an increase of 5.8% from fiscal 2013. 
 
Total front-end sales increased 2.1% in August compared with the same month in fiscal 2013, while comparable-store front-end sales increased 1.4%. Customer traffic in comparable stores decreased 1.7% while basket size increased 3.1%.
 
Prescriptions filled at comparable stores increased by 1.1% in August and increased 3.2% on a calendar day-shift adjusted basis. August 2014 had one additional Sunday and one fewer Thursday compared with August 2013. These calendar shifts negatively impacted prescriptions filled at comparable stores by 210 basis points.
 
August pharmacy sales increased by 5.4%. Comparable-store pharmacy sales increased 5% and increased by a calendar day-shift adjusted 7.1%. Calendar day-shift adjusted comparable-store pharmacy sales were negatively impacted by 180 basis points due to generic drug introductions in the last 12 months. Pharmacy sales accounted for 65.7% of total sales for the month.
 
Sales in comparable stores increased by 3.7% in August. Calendar day shifts negatively impacted total comparable sales by 140 basis points. Generic drug introductions in the last 12 months negatively impacted total comparable sales by 120 basis points.
 
Total sales for fourth-quarter 2014, which ended Aug. 31, were 19.1 billion, up 6.2%. Comparable store sales for the fourth quarter of fiscal 2014 increased 5.6%, while front-end comparable store sales for the quarter increased 1.3%. Prescriptions filled at comparable stores increased 3.9% in the fourth quarter and comparable pharmacy sales increased 8.2%.
 
Calendar 2014 year-to-date sales for the first eight months were $50.9 billion, an increase of 5.7% from $48.2 billion in 2013.
 
Walgreens stated on its Aug. 6, 2014, conference call with analysts that in the fourth quarter, it expected gross profit margin to be down a similar percentage year-over-year to what was experienced in the third quarter. This is due to ongoing gross profit margin pressures, including recent changes in the environment of the company's pharmacy business including ongoing generic drug inflation, reimbursement pressure and a shift in pharmacy mix toward 90-day prescription refills at retail locations and Medicare Part D. The company also pointed out that last year's fourth quarter included net gains from certain litigation matters, which reduced selling, general and administrative expenses by just under 1 percentage point.
 
Walgreens opened 23 stores during August, including four relocations, and closed five. On Aug. 31, Walgreens operated 8,309 locations in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. That includes 8,206 drug stores, 91 more than a year ago, including 70 net stores acquired over the last 12 months. The company also operates infusion and respiratory services facilities, specialty pharmacies and mail service facilities. Its Take Care Health Systems subsidiary manages more than 400 in-store convenient care clinics.
 
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BlueCross BlueShield of Western New York names Walgreens as its specialty pharmacy provider

BY Michael Johnsen

BUFFALO, N.Y. — BlueCross BlueShield of Western New York on Wednesday welcomed Walgreens to the health plan’s retail pharmacy network and named the retailer the plan's specialty pharmacy provider. 
 
The agreement allows BlueCross BlueShield members to fill their standard prescriptions at more than 30 Walgreens locations in the eight counties of Western New York, and at more than 8,000 locations nationwide. Along with home delivery of specialty medications, Walgreens Specialty Pharmacy staff will work closely with members and their physicians to provide ongoing, individualized support. 
 
With the addition of Walgreens, BlueCross BlueShield’s retail pharmacy network expands to 359 retail locations locally and nearly 70,000 nationwide. 
 
“We are pleased to welcome Walgreens to our already expansive retail pharmacy network,” stated Thomas Schenk, BlueCross BlueShield SVP and chief medical officer. “Walgreens meets our high standards of quality and safety and the addition of these locations offers even more convenience for our members.” 
 
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