Record number of filled prescriptions drive Walgreens’ quarterly results
Walgreens filled a record 821 million prescriptions which helped boost the company’s retail pharmacy market share for the fiscal year to 19.1%.
Walgreens posted a sales gain of 0.8% for the fiscal year ended Aug. 31, reaching a record $72.2 billion. Early morning trading boosted Walgreens' share price from a close of $53.80 on Monday to $56.06, an increase of 4.2%.
Sales for the fourth quarter increased 5.1% compared with $17.9 billion. Front-end comparable store sales increased 1.6% in the fourth quarter, customer traffic in comparable stores decreased 1.9% and basket size increased 3.6%, while total sales in comparable stores increased 4.6%. Private brand penetration increased to 22.3% for the fourth quarter and included the launch of 400 store brand items.
Prescription sales, which accounted for 63.9% of sales in the quarter, increased 6.1%, while prescription sales in comparable stores increased 6.4%. The company filled 203 million prescriptions in the quarter, an increase of 8.2% over last year’s fourth quarter. Prescriptions filled in comparable stores increased 7.1% in the quarter.
The company opened or acquired 33 new drug stores in the fourth quarter compared with 54 stores in the year-ago quarter. In fiscal 2013, Walgreens added a net gain of 186 new drug stores, including 76 net through acquisitions.
Walgreens also administered 8.5 million immunizations and vaccinations throughout the fiscal year.
"We continue to build on our successful immunization program, a foundation of our effort to transform community pharmacy,” said Greg Wasson, Walgreens president and CEO. "We remain the only chain pharmacy providing all 17 CDC-recommended vaccines in every state where we can provide them, and the largest retail provider of flu vaccines in the country."
This flu season, Walgreens is partnering with the United Nations Foundation to help provide up to 3 million vaccines to children in developing countries through a donation to the Foundation’s Shot@Life campaign.
“Our solid results, especially in the latter part of the quarter, round out a year of steady progress on our long-term growth strategies to create a well experience, transform community pharmacy and establish an efficient global platform with our strategic partner Alliance Boots and with our long-term relationship with AmerisourceBergen,” Wasson said. “Extraordinary customer response to our Balance Rewards loyalty program, now with more than 85 million enrollees, gives us a wealth of new insights to increase customer delight. In addition this year, we expanded our Healthcare Clinic and pharmacy services, and we forged long-term contracts with fair and predictable reimbursement rates with the major commercial pharmacy payers, bringing greater stability and certainty to our pharmacy book of business.”
Walgreens also is positioning to be a more significant player across one of the faster growing demographics in the prescription space — baby boomers.
"We began participating as part of the preferred pharmacy networks of three of the top national Medicare Part D plans, giving us a leading role in serving the growing number of Medicare-eligible Americans," Wasson said.
Walgreens joint synergy program with its strategic partner, Alliance Boots, delivered combined first-year net synergies of $154 million, exceeding the previously stated range of between $125 million and $150 million. Alliance Boots contributed 8 cents per diluted share to Walgreens' fourth-quarter adjusted results.
Walgreens operates 8,582 locations in all 50 states, the District of Columbia, Puerto Rico and Guam. The company has 8,116 drugstores nationwide, 186 more than a year ago. Walgreens also operates worksite health-and-wellness centers, infusion and respiratory services facilities, specialty pharmacies and mail-service facilities. Its Healthcare Clinics subsidiary manages more than 700 in-store convenient care clinics and worksite health and wellness centers. Walgreens e-commerce business includes Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com.