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Walgreens pushes April sales up modestly, but early Easter, generics pressure results

BY Jim Frederick

DEERFIELD, Ill. An earlier-than-usual Easter sales season put a drag on sales at Walgreens’ more than 6,200 drug stores in April, with sales for the month rising 7.9 percent over the same month last year but same-store sales up an anemic 1.6 percent. Comp-store front-end sales actually declined by 3.1 percent, the company reported today.

Total sales were $8.45 billion in April, Walgreens said, with pharmacy sales up 10.8 percent for the month vs. last year, and comp-store pharmacy sales rising 4.2 percent. “Comparable pharmacy sales were negatively impacted by 3.7 percentage points due to generic drug introductions in the last 12 months,” Walgreens reported.

Total prescriptions filled at comparable stores increased 2.7 percent.

Overall, April sales were hurt by the fact that Easter fell in March this year compared with an April Easter in 2007, according to the company. A truer picture of Walgreens’ performance comes by combining sales for March and April, the company asserted, when sales rose 9.2 percent over the same two months in 2007. Comparable store sales for the March/April period rose 3.0 percent, while comparable store front-end sales for the combined months increased 4.0 percent.

“We remain cautious on Wag, as a weak macro environment may put pressure on sales and expense management,” noted retail analyst Deborah Weinswig of Citi Investment Research, a division of Citigroup Global Markets. Reacting to Walgreens’ April numbers in a May 2 report, she said that pressure on operating costs could also “potentially compromise service quality” at the nation’s top drug chain.

Besides the impact of an early Easter, Weinswig also cited pressure from the replacement of big-selling prescription drugs like Zyrtec with lower-priced generic and OTC versions. Those generics, she noted, “continue to negatively impact pharmacy sales.”

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Rite Aid posts positive monthly results

BY Michael Johnsen

CAMP HILL, Pa. Rite Aid on Thursday posted a same-store sales increase of 0.5 percent for the four weeks ended April 26, representing a pharmacy same-store sales lift of 1.8 percent and a 1.7 percent drop in front-end comparable-store results—reflecting the shift of Easter from April to March this year.

Front-end same store sales for the combined March and April sales periods increased 1.9 percent, Rite Aid stated.

The same-store sales results do not yet include last year’s acquired Brooks/Eckerd stores.

Total drug store sales for the four-week period (including the Brooks/Eckerd store base) increased 46.9 percent to $2 billion. Prescription revenue accounted for 68.3 percent of drugstore sales, and third party prescription revenue represented 96.2 percent of pharmacy sales.

Year-to-date same-store sales for the eight-week period increased 1.6 percent, consisting of a 1.4 percent lift in pharmacy same-store sales and a 1.9 percent increase in front-end same store sales.

Total drug store sales for the eight-week period 2008 increased 48.8 percent to $4 billion.

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Publix reports increase in Q1 sales, earnings

BY Michael Johnsen

LAKELAND, Fla. Publix on Thursday reported $6.2 billion in sales for the first quarter of 2008, a 6 percent increase. Net earnings for the first quarter were $343.2 million, compared to $317.6 million in 2007, an increase of 8.1 percent.

Comparable-store sales for the first quarter of 2008 increased 3.6 percent.

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