February flu benefit not as big as billed for Walgreens

DEERFIELD, Ill. — Walgreens on Thursday posted sales growth of 8.7% to $18.5 billion for its second quarter ended Feb. 28.

Comparable-store sales were up 4%, with a 4% increase across front-end same-store sales. Prescriptions filled grew by 4.5%; quarterly same-store pharmacy sales were not provided.

For the month of February, Walgreens’ pharmacy sales increased 6.4%, while comparable-pharmacy sales increased 2.7%, accounting for 64% of total sales for the month. Total front-end sales increased 10.6% in February, including 4.5 percentage points from Duane Reade stores. Comparable-store front-end sales increased 3.8% (no comparable sales figures include Duane Reade, Walgreens noted). Customer traffic in comparable stores increased 1.6%, while basket size increased 2.2%.

Sales in overall comparable stores increased 3.1%, falling just shy of projected consensus of 3.3% and well shy of Credit Suisse estimates of 4.5% released earlier this week. Credit Suisse calculated a 150 basis-point benefit from increased flu activity that would carry pharmacy comp sales higher by up to 5%. Walgreens recorded a 120 basis-point flu benefit, but only a 2.7% lift in overall pharmacy same-store sales, citing as much as a 120 basis point negative impact from fewer flu shots and the number of Midwest consumers who refilled their prescriptions earlier in January ahead of a severe February winter storm at the top of the month.

Flu shots administered season-to-date at pharmacies and Take Care Clinics totaled 6.4 million.

Overall February sales of $5.7 billion represented an increase of 7.8% from February 2010. Duane Reade stores, acquired in April 2010, contributed 2.7 percentage points to the total sales increase for the month, Walgreens reported.

Prescriptions filled at comparable stores increased 4.3% for the month of February.