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Walgreen Co. Message Board

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  • negfeedback2000 negfeedback2000 Nov 11, 2003 11:51 PM Flag

    missing 1 bil

    Thank you for your thoughts.
    I looked futher at the monthly sales numbers at both sites. Wag's only go back to last year so I'm only talking about this past year's numbers.
    It seems odd that monthly numbers don't seem to have much of a ramp upward. It is as if there is a jump from the end of the year into the next, then, sales seem fairly flat January through September. I think one should be able to see some kind of ramp up in numbers as the stores that were opened each month, past and present, start adding to the numbers. CVS numbers seem to vary more. Wag's numbers seem odd by comparison, IMO, as business is bound to vary from month to month, as seen in the month of December by increased business due to Xmas.
    Further, the majority of people I talk to, in various businesses, report business being down and not getting better yet. So, there are still a lot of people watching their money.
    High unemployment, recession etc. And Wag can post numbers without missing a beat.
    I know that Wag gets a majority of biz from scripts and they say most of the scrips are covered by insurance but CVS doesn't?
    If one looks at the various earnings reports, one reads of slow business enviorment, higher energy costs, legal expenses, labor costs etc. The list goes on and on as to why earnings are poor.
    I know all you Wag rah rahs will take offense but, one must be very careful in this day and age of insider trading, accounting and mutual fund scandals.
    Tomorrow I'll see if I can see this growth with the generic drug makers, logicaly they should be showing good growth too because the brand name drugs arent.

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    • You should be a politician. You can talk all day and not say anything.

    • >>I looked futher at the monthly sales numbers at both sites. Wag's only go back to last year so I'm only talking about this past year's numbers.<<

      OK. I see what you're talking about. Sales in Aug, for example, were only 4.6% ahead of sales in Jan. FYI, WAG has qtrly sales figures and monthly gross sales % increases going back to 1998-1999 here:

      http://investor.walgreens.com/downloads/030929lai3wag.xls

      But that doesn't answer your question, which is:

      >>It seems odd that monthly numbers don't seem to have much of a ramp upward. It is as if there is a jump from the end of the year into the next, then, sales seem fairly flat January through September.<<

      I think there are a couple of things going on here. First, WAG's sales are 60% Rx, which are much less seasonal than other retail goods. But Rx is seaonal, but on a different schedule. Rx sales tend to be higher in the cold weather months (Dec - Apr), when most other retailer tends to see their seasonal lows (Jan-Apr). This timing softens out the seasonality and smoothes out sales. Also, front end sales get a boost in Feb from Valentines Day and either March or April (Easter), which are slow months for most retailers. May-July really have no comparable holidays (July 4 is not a biggie) and there's no catlyst for front end sales unitl back to school. This helps to explain why sales might be relatively flat Jan - Sep, but WAG has all these characteristics in common with CVS and it doesn't explain why WAG's monthly sales are less variable than CVS.

      I don't really study CVS, so I don't know what the answer is. (I don't even know for sure that CVS's sales are that variable from Jan-Sep. They have a lot of historical press releases on their website, but the first couple that I looked at only gave the % sales increases, not gross sales totals that I could compare in sequential months).

      I will note that WAG's new store openings tend to be concentrated in WAG's fourth qtr. This year in particular, the new store openings were concentrated in July and August, so there was less impact to sales from new stores during the first 7-8 months of calendar year 2003 than usual.

    • >>Tomorrow I'll see if I can see this growth with the generic drug makers, logicaly they should be showing good growth too because the brand name drugs arent.<<

      I'll be interested to learn what you find. A few names (tickers) I'm familiar with:

      MYL
      TARO
      BRL
      WPI
      IVX

 
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