Key Walgreen revenue metric climbs 5.8 pct in Oct

Key Walgreen revenue metric climbs 5.8 percent in October, pushed by pharmacy sales

Associated Press

DEERFIELD, Ill. (AP) -- Walgreen Co.'s revenue from established stores climbed 5.8 percent last month, higher than analysts expected, as the nation's largest drugstore chain doled out more flu shots and absorbed a smaller revenue hit from generic drugs.

The Deerfield, Ill., company said Tuesday that pharmacy revenue from stores open at least a year jumped 7.9 percent, while revenue from the front end, or rest of the store, rose 2.3 percent.

Analysts expected an overall increase of 4.8 percent, a pharmacy gain of 5.6 percent and a bigger front-end increase of 2.8 percent, according to Thomson Reuters.

Revenue from stores open at least a year is a key indicator of a retailer's health, because it excludes the potentially distorting impact of recently opened or closed stores. Walgreen operated 8,131 drugstores last month, or 101 more than a year ago.

The drugstore chain said its pharmacies and clinics have administered more than 4.9 million flu shots so far this season, compared to 3.6 million at the same point last year.

The company's pharmacy sales took a 1 percent hit last month from generic drugs, a smaller impact than Walgreen saw earlier this year.

Top-selling brand-name drugs like the cholesterol fighter Lipitor have lost U.S. patent protection from cheaper generic drugs in recent years, and that hurts monthly sales for drugstore chains like Walgreen. But it also helps their bottom lines, because generics are more profitable for drugstores.

The company's revenue also was hurt last year because it had to temporarily close hundreds of stores the last week of October when Superstorm Sandy hit the East Coast. That, in turn, helped the comparison with October, 2013.

Walgreen shares climbed 33 cents to $60.48 Tuesday afternoon. The stock is up 63 percent so far this year.

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