The verdict is in. Walgreen
I miss you, Express
The impact of the spat is clear for all to see, as same-store sales dropped 8.6% in February, lower than the 7.2% decline that analysts had predicted. The sales hit was attributed to a weak flu season and lower sales of new generic drugs, but a major chunk of the drop was due to the Express split.
Prescriptions filled by the Illinois retailer dropped by 9.5% in February. In the same month last year, Express Scripts prescriptions contributed to 12% of the total number of prescriptions filled. Front-end sales, however, rose by 6.9% from last year's comparable month. This was coupled with a 2% rise in comps in the same segment, despite the fact that store traffic fell.
Breaking up is hard to do
In fiscal 2011, Express contributed $5.3 billion to Walgreen's kitty, which accounted for about 7% of the company's total revenue. Walgreen stood to lose much when it decided to sever ties with Express.
The breakup gave Walgreen's peers the opportunity to steal away its customers. Last month, CVS Caremark
Can Walgreen move on?
After Walgreen's profits fell 4.5% last quarter, things certainly don't look to be improving for the retailer. The company had expected to retain the vast majority of last year's prescription volume. However, February's figures paint a different picture. With Walgreen set to announce its quarterly results later this month, things definitely aren't looking great for the Deerfield-based retailer.
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