Walgreen Co.'s (WAG) same-store sales rose 5.8% during October, driven by strong growth in the pharmacy section, while the front of the store also showed improvement.
Analysts polled by Thomson Reuters recently had expected same-store sales growth of 4.6%.
Despite lower gasoline prices, the backdrop of the government shutdown during the month and the debt-ceiling fight had the potential to weigh on consumer spending.
Drug-store retailers have seen a wave of major generic drug introductions put pressure on sales growth. The shift in consumers' drug purchases toward generics has led pharmacy companies to take steps to improve their performance--including a recent agreement by Walgreen and European drug giant Alliance Boots GmbH with drug wholesaler AmerisourceBergen Corp. ( ABC ).
Last month, Walgreen's same-store sales rose 2.3% in the front of the store, below analysts' estimates of 2.8% growth. Same-store customer traffic edged up 0.6% while basket size increased 1.7%.
In the pharmacy section, same-store sales were up 7.9%, above analysts' estimates of 5.6% growth. Same-store prescriptions filled were up 5.7% with a boost from an increase in flu shots. Calendar shifts had a negative impact of half a percentage point in addition to negative impacts from generic drug introductions.
Total October sales rose 6.1% to $6.37 billion .
DEERFIELD, Ill. --(BUSINESS WIRE)-- Walgreens (NYSE: WAG) (Nasdaq: WAG) had October sales of $6.37 billion , an increase of 6.1 percent from $6.0 billion for the same month in fiscal 2013.
Total front-end sales increased 3.5 percent compared with the same month in fiscal 2013, while comparable store front-end sales increased 2.3 percent. Customer traffic in comparable stores increased 0.6 percent while basket size increased 1.7 percent.
Prescriptions filled at comparable stores increased by 5.7 percent in October and increased 6.2 percent on a calendar day-shift adjusted basis. This year's October had one additional Thursday and one fewer Monday compared with October 2012 . These calendar shifts negatively impacted prescriptions filled at comparable stores by 0.5 percentage point.
Prescriptions filled at comparable stores also were positively impacted by 1.1 percentage points due to more flu shots versus last year and were negatively impacted by 0.2 percentage point due to lower incidence of flu in this year's October.
October pharmacy sales increased by 7.8 percent, while comparable store pharmacy sales increased 7.9 percent and increased by a calendar day-shift adjusted 8.4 percent. Calendar day shifts negatively impacted pharmacy sales in comparable stores by 0.5 percentage point. Calendar day-shift adjusted comparable store pharmacy sales were negatively impacted by 1.0 percentage point due to generic drug introductions in the last 12 months, and were positively impacted by 0.7 percentage point due to more flu shots versus last year. Pharmacy sales accounted for 65.5 percent of total sales for the month.
Flu shots administered at pharmacies and clinics season to date were more than 4.9 million versus nearly 3.6 million last year.
Sales in comparable stores increased by 5.8 percent in October. Calendar day shifts negatively impacted total comparable sales by 0.3 percentage point, while generic drug introductions in the last 12 months negatively impacted total comparable sales by 0.7 percentage point.
Calendar 2013 sales to date were $60.47 billion , an increase of 4.3 percent from $57.97 billion in 2012.
Fiscal 2014 year-to-date sales for the first two months were $12.29 billion , up 7.0 percent from $11.49 billion in the comparable period in fiscal 2013.
Walgreens opened 14 stores during October, including four relocations, and closed two.