DEERFIELD, Ill. (AP) — Walgreen Co. said Thursday that its sales improved in December, but its split from Express Scripts Inc. and the mild flu season continued to hurt its business.
The largest U.S. drugstore chain said sales at stores open at least a year rose 0.4 percent, better than the 0.1 percent decline analysts expected, according to Thomson Reuters. Pharmacy revenue grew 0.2 percent and sales of other products, like cosmetics, food, and household goods, rose 0.6 percent.
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.
Walgreen's dispute with Express Scripts, and the impact it will have on sales, overshadowed the revenue increases. Prescriptions filled fell 0.6 percent, and they could suffer more in January. That's because Express Scripts, an employee-benefits manager that pays drugstores to fill prescriptions, has been fighting with Walgreen over reimbursement rates. Walgreen let its contract with Express Scripts expire on Dec. 31, saying it would rather give up the revenue it gets from that contract than continue filling unprofitable prescriptions.
Walgreen filled 88 million prescriptions for Express Scripts in its last fiscal year, and Walgreen now expects to continue filling about 10 million of those prescriptions per year.
Walgreen said the milder flu season lead to a 1.5 percent decline in prescriptions. Walgreen has given 5.3 million flu shots since August, down from 6 million during the same period in 2010.
Customer traffic fell 0.6 percent, although customers spent slightly more money per trip.
Total sales in December rose 2.7 percent from a year ago, to $6.98 billion.
Walgreen had 7,818 stores at the end of the month. In December it opened nine stores, acquired one, and closed two. Its next-largest competitor, CVS Caremark Corp., runs about than 7,300 stores.
Shares of Walgreen fell 31 cents to $32.52 in morning trading.
