Walgreen Co. (WAG) Misses Q2 EPS by 2c; Front-End Comps Rose 2%
Walgreen Company (NYSE: WAG) reported Q2 EPS of $0.91, $0.02 worse than the analyst estimate of $0.93. Revenue for the quarter came in at $19.6 billion versus the consensus estimate of $19.61 billion.
Front-end comparable store sales (those open at least a year) increased 2.0 percent in the second quarter, customer traffic in comparable stores decreased 1.4 percent and basket size increased 3.4 percent, while total sales in comparable stores increased 4.3 percent.
Prescription sales, which accounted for 62.2 percent of sales in the quarter, increased 7.0 percent, while prescription sales in comparable stores increased 5.8 percent. The company filled 214 million prescriptions in the quarter, an increase of 2.8 percent over last year’s second quarter. Prescriptions filled in comparable stores increased 2.2 percent in the quarter. As of Feb. 28, Walgreens increased its retail prescription market share 20 basis points from a year ago to 19.0 percent as reported by IMS Health on a 30-day adjusted basis.
Walgreens also saw strong growth in prescriptions filled for Medicare Part D patients, which increased 16 percent in the second quarter compared with last year’s quarter, while the company’s Part D market share increased 0.8 percentage point in February compared with the same month a year ago.
The total number of all CDC-recommended immunizations and vaccines administered by Walgreens reached 8.6 million in the first half of the fiscal year, an 11 percent increase over the previous year.
“Our second quarter performance, in spite of expected headwinds from slower generic drug introductions, comparisons with last year’s flu season and severe weather, was marked by solid top-line growth driven by record quarterly sales and record second-quarter prescriptions filled,” said President and CEO Greg Wasson. “We also continued to gain prescription market share while we maintained a firm hold on our costs.
“We head into the second half of the year with nearly 80 million active members in our Balance® Rewards loyalty program and with expectations that the generic drug headwind that affected the first half will ease and turn around by the end of the year. In addition, our joint synergy program with Alliance Boots is expected to exceed its second-year estimate, and we are bringing critical elements of the Well Experience to additional stores.”
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