Tags: Walgreen | Posts | Surprise | Drop | Same Store | Sales

Walgreen Posts Surprise Drop in Same Store Sales

Wednesday, 06 Jan 2010 10:17 AM

Walgreen Co. said sales at its drugstores open for at least a year fell 0.3 percent in December instead of rising as Wall Street had expected, and its shares slipped nearly 3 percent.

Same-store sales rose 1.8 percent at pharmacy counters, but fell 3.1 percent at the front end of the stores, where Walgreen sells general merchandise such as cosmetics and candy.

Analysts on average expected Walgreen's overall same-store sales to rise 2.3 percent, with increases of 3.3 percent in pharmacy and 0.6 percent in general merchandise, according to Thomson Reuters Data.

In comparable stores, customer traffic fell 0.8 percent, and the average sales per transaction fell 2.3 percent.

The company attributed much of the drop in general merchandise sales to its decision to sell fewer seasonal items. That meant Walgreen had to resort to fewer discounts than in December 2008 to get holiday-themed goods off its shelves as consumers cut back on discretionary purchases.

Walgreen spent 28 percent less on seasonal items for comparable stores, Chief Executive Officer Greg Wasson said in a statement.

While that crimped holiday clearance sales, it also left the company in a better inventory position and with better gross margins than a year earlier, he said.

December was the first time Walgreen's monthly same-store sales fell since February 2009, when they declined 1.9 percent.

At that time, the company faced a tough comparison with a year earlier, when February had an additional day because 2008 was a leap year.

Total sales in December rose 3.6 percent to $6.3 billion.

Walgreen, which runs 7,149 stores, competes with smaller chains run by CVS Caremark Corp. and Rite Aid Corp.

CVS, which also runs a major pharmacy benefits management business, does not issue monthly sales tallies.

On Monday, Rite Aid said its December same-store sales fell 1.8 percent, marking its seventh consecutive monthly decline.

© 2017 Thomson/Reuters. All rights reserved.

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Walgreen Co. said sales at its drugstores open for at least a year fell 0.3 percent in December instead of rising as Wall Street had expected, and its shares slipped nearly 3 percent. Same-store sales rose 1.8 percent at pharmacy counters, but fell 3.1 percent at the front...
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2010-17-06
 

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