Drugstore chain Walgreen Co. said its November sales improved, but the results disappointed Wall Street and the company’s shares fell in Wednesday trading.
At stores open at least a year, Walgreen said sales rose 3.9 percent. Analysts were expecting greater improvement of 6.1 percent, according to Thomson Reuters. Walgreen said pharmacy revenue was hurt by new launches of low-cost generic drugs, and sales of nonpharmacy items took a hit due to slowing demand for cough, cold and flu products, and further weakness in the economy.
At those stores, pharmacy revenue rose 5.7 percent, and sales of “front end” items like cosmetics and food grew 0.8 percent. Analysts expected pharmacy sales to rise 7.2 percent and front-end sales to rise 3.8 percent.
“The Thanksgiving weekend (was) notably softer” than a year ago, the company said.
In morning trading, Walgreen shares lost $1.68, or 4.3 percent, to $37.69.
Sales at stores open at least one year are considered a key indicator of retailer health because they shows results at older stores, leaving out revenue from newly opened locations. Walgreen runs 7,147 drugstores around the U.S., including 517 that were opened in the last year. It also has about 500 worksite health centers, home care facilities, and specialty and mail-order pharmacies.
Walgreen opened 47 stores during the quarter, including seven that were relocated, and acquired two stores.
For November, the company’s total revenue grew 8.7 percent to $5.36 billion from $4.93 billion a year ago. Pharmacy sales rose 9.7 percent. Front-end sales increased 6.1 percent.
For the first three months of fiscal 2010, Walgreen said its revenue grew 9.5 percent to $16.36 billion from $14.95 billion. That surpassed analyst expectations of $16.26 billion.
The company is scheduled to report its fiscal first-quarter results on Dec. 21. Analysts are looking for a profit of 48 cents per share, on average.
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