Walgreen Co. (NYSE: WAG) is still trying to recover from weak comparable store sales figures. The drug store giant reported that October same-store sales were down by 5.9%, worse than expected, due to changes in customer traffic. Analysts were looking for closer to a 4.5% drop in same-store sales.
While the company has mostly resolved its spat with Express Scripts Holding Co. (NASDAQ: ESRX), the traffic disappointment now seems to be up in the front of the stores. It is going to take some time for the pharmacy sales to recover from the Express Scripts dispute and the numbers show that: total pharmacy sales were 2.6% lower but same-store pharmacy sales were down by 7.5%. Another hit to pharmacy sales has been the patent cliff and the trend to generics.
The total front-end of the store sales were down 1.5% and the same-store sales component were down by almost 3% in October. Analysts were hoping for a reading of flat to up marginally.
Walgreen said that traffic measured at its comparable stores was down by 5.2%, although its sales measured per basket were up more than 2%.
Walgreen did note that Hurricane Sandy has an impact on sales as more than half of its stores in the affected areas were closed for some period.
Walgreen shares have yet to indicate any serious change based on the $34.89 close on Friday, and the 52-week trading range is $28.53 to $37.35. What is interesting is that this just does not read like nor feel like a report that would be from a company much closer to its 52-week highs than its lows.
JON C. OGG
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