Walgreens’ December Sales Rose Higher Despite New Generic Drugs


Source: Philip Pessar

Walgreen’s (NYSE:WAG) same-store sales rose by 6.1 percent in December, according to the Wall Street Journal. Interestingly, even as the company reported higher pharmacy sales, certain other factors such as the introduction of a new wave generic drugs, as well as fewer flu vaccines hurt pharmacy sales. New generic drugs in particular have recently put a lot of pressure on pharmacy sales growth as more and more consumers shift toward generic options.

Walgreen’s non-pharmacy item sales rose 2.5 percent, and consumers’ basket-size increased as well by 3.8 percent. Same-store customer traffic, however, fell 1.3 percent. Sales for pharmacy items rose even more so than front-end, non-pharmacy items in December, by 9 percent, and similarly, same-store prescriptions filled rose by 5.3 percent.

The company’s total December sales rose 7.2 percent to $7.2 billion. The company also closed six stores in December, but it opened five and acquired three more; one of the five opening was a re-location, reports the Wall Street Journal.

Early last year Walgreens and Alliance Boots entered into a strategic long-term partnership with AmerisourceBergen, one of North America’s largest pharmaceutical services companies. “Together these three companies will make it easier for manufacturers to bring products to market,” a Walgreens press release dated March 2013 said. The partnership is part of an effort to improve Walgreens’ performance as the consumer trend toward generic drugs continues.

For the first four months of the fiscal year 2014 Walgreen’s total sales rose 6.3 percent, to $25.54 billion; in December, Walgreens announced that its fiscal year first quarter profit rose 68 percent due to the company’s strong pharmacy section and as a result of benefits from its recent partnership with AmerisourceBergen GmbH. Total sales during the first quarter of fiscal year 2014 totaled 18.35 billion, per the Wall Street Journal.