Key revenue figure falls 6.8 pct for Walgreen

Key Walgreen revenue figure falls 6.8 percent in March due mainly to Express Scripts split

Associated Press

DEERFIELD, Ill. (AP) -- Drugstore operator Walgreen Co. said Tuesday monthly revenue from stores open at least a year slid again in March, due mainly to its split with pharmacy benefits manager Express Scripts Inc.

The largest U.S. drugstore chain said the revenue metric dropped 6.8 percent last month, including an 11.1 percent drop in pharmacy sales and a 1.2 percent gain for revenue from the front end, or rest of the store.

Revenue at stores open at least a year is a key indicator of a retailer's health because it excludes the impact of recently opened or closed stores.

The performance missed Wall Street expectations. Analysts predicted, on average, revenue from stores open at least a year to fall 4.9 percent, according to Thomson Reuters. That included a forecast for a 9.8 percent drop from the pharmacy and a 3.2 percent gain from the front end.

Walgreen, based in Deerfield, Ill., has said its sales would dip this year after the drugstore chain and Express Scripts let a contract between them expire at the end of last year. Prescriptions processed by Express Scripts made up 12.6 percent of the drugstore chain's prescriptions in March 2011.

Walgreen also reported a 4.6 percent drop in revenue from stores open at least year for both January and February. Last week, it also said its fiscal second-quarter earnings fell almost 8 percent, mostly due to Express Scripts.

Walgreen has said it would rather give up the revenue it got from Express Scripts than continue filling unprofitable prescriptions. Express Scripts, based in St. Louis, has said it ended the Walgreen contract because the drugstore chain wanted a premium compared to what Express Scripts paid other pharmacies.

For March, Walgreen revenue also was affected by a slow flu season and calendar day shifts. Last month had one additional Friday and Saturday and one fewer Tuesday and Wednesday compared to March 2011, and that hurt prescriptions filled at stores open at least a year by 2.1 percentage points.

Walgreen opened eight stores last month and operated 7,847 drugstores at the end of the month. The chain has more stores than competitors CVS Caremark Corp. and Rite Aid Corp.

Shares of Walgreen fell 27 cents to $33.58 in Tuesday morning trading, while broader trading indexes also opened down less than 1 percent.

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