Also during the quarter, Walgreen closed and relocated 119 stores. The retailer will close or relocate 400 units next year. "Our store expansion program is taking advantage of the larger prescription market while growth in the drugstore industry overall is rather stagnant," said Rick Hans, the company's director of finance, during a recorded earnings call.
First-quarter same-store sales at Walgreen drugstores were up 9.7% year over year. There was a 11.9% jump in pharmacy sales, while transactions in non-pharmacy departments rose 5.8%.
Total sales during the quarter shot up 16.6%, to $12.7 billion, and the company's earnings were $432 million, up from $346 million in the same year-ago period. Prescriptions made up 65.7% of the chain's total transactions.
Walgreen's management says it is not swayed by competitors lowering their costs for generic drugs and consolidation in the industry, such as Rite Aid's $3.4-billion acquisition of 1,858 drugstores under the Eckerd and Brooks banners. "We'll never lack strong competitors, new retail concepts and more regulation," Hans says.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.