Walgreens reports Q4, fiscal 2009 results; announces new initiative

DEERFIELD, Ill. Walgreens hit a record in sales for fiscal 2009, the company said in a recent earnings report.

The retail pharmacy chain reported fourth quarter 2009 sales of $15.7 billion, a 7.6% increase over fourth quarter 2008, bringing the total for fiscal 2009 to a record $63.3 billion. Meanwhile, cash flow from operations increased by 35%, to $4.1 billion.

At the same time, however, net earnings for the quarter, which ended Aug. 31, were $436 million, or 44 cents per share, compared to $443 million and 45 cents in fourth quarter 2008, representing a 1.5% decrease.

“We posted solid fourth quarter results, while continuing to advance one of the most important strategic and operational transformations in our company’s history, and we’ve done this while navigating through the most severe economic downturn in decades,” Walgreens president and CEO Greg Wasson said in a statement. “Despite the tough environment, we’ve maintained our financial flexibility to invest in the right opportunities, while enhancing our relevancy to customers.”

Prescription sales increased by 9%, accounting for 66.5% of sales in the quarter; by comparison, the company said, competitors’ prescription sales increased by 4.5%.

The company has lately been busy opening stores around the country, having opened 149 during the fourth quarter, compared with 162 in the third quarter and 199 in fourth quarter 2008. As of Aug. 31, the chain operated 6,997 stores in 50 states, the District of Columbia and Puerto Rico, and will open its 7,000th store in Brooklyn, N.Y., Thursday.

“We’re now balancing the pace of new store openings with other growth opportunities,” Wasson said. “We’re determined to grow market share through continued organic store growth, increased comparable sales and pharmacy file buys.”

Walgreens also introduced a national initiative for 90-day prescriptions at community pharmacies for maintenance and chronic care medications. It hopes the program will increase adherence by reducing the frequency of trips to the drug store while building stronger face-to-face relationships between pharmacists and customers, who might otherwise receive 90-day supplies of medications via mail-order pharmacies.

“Studies conducted by a range of healthcare professionals show that adherence to medications – one of the most critical components of any healthcare program – significantly increases through face-to-face interaction with trusted healthcare professionals like pharmacists,” Wasson said. “In fact, for many chronic care conditions, Walgreens has seen an approximately 15% increase in adherence to medications for patients receiving a 90-day retail prescription versus those receiving a 30-day supply.”

Realizing that increasing adherence reduces costs has led many insurers and managed care organizations to offer 90-day retail prescription benefits to their beneficiaries at lower costs than the traditional 30-day prescriptions.

“We encourage insurers and managed care companies to extend this 90-day at retail benefit to their members and pass on the savings through reduced co-pays,” Walgreens Health Services president Stanley Blaylock said in a statement. “Many are already doing so, and we applaud them.”