Walgreen says March sales and key reading rose because of earlier Easter compared to 2009

Walgreen says earlier Easter lifted March sales

DEERFIELD, Ill. — The earlier Easter season boosted Walgreen Co.’s sales in March, bringing more customers into its stores and increasing sales of seasonal items, the largest U.S. drugstore operator said Monday.

Walgreen said sales at stores open at least a year grew 2.3 percent for the month. In those stores, pharmacy revenue rose 2.4 percent and sales of non-pharmacy items — products such as food, cosmetics, and holiday goods — rose 2.2 percent.

Sales at stores open at least a year are considered an important measurement of retailer health because they exclude results from stores that have opened or closed in the past year.

Easter Sunday came on April 4 this year, compared with April 12 in 2009. That moved more sales of holiday items into March from April, and Walgreen said the shift was responsible for almost all of its sales growth. It credited 1.7 percent of the pharmacy growth and 2.1 percent of the non-pharmacy or “front-end” growth to the earlier holiday.

Prescriptions filled at stores open at least one year rose 4.5 percent, Walgreen said.

Jefferies & Co. analyst Scott Mushkin said the economy may be improving somewhat, but Walgreen’s front-end sales are struggling and pharmacy revenue at older stores has been weak.

“Sluggish front-end trends remain despite some signs the macro environment is getting a bit better,” he wrote.

Mushkin said while the March results were about equal to Wall Street estimates, he expected stronger results. He thinks the report will put more pressure on the company to make sure its store remodeling and inventory streamlining plans work. He added that Walgreen’s April sales will be critical.

Walgreen said its total sales for the month increased 6.4 percent to $5.82 billion. Pharmacy revenue increased 5.6 percent, and front-end sales grew 6.6 percent.

The company opened 52 new stores in March, including eight relocations. It acquired four stores and closed three. Walgreen ran a total of 7,225 drugstores at the end of the month.

By the end of April, it expects to complete its acquisition of the New York-based Duane Reade chain, which will give it 257 more stores in the metro New York area.

Walgreen shares fell 2 cents to $37.73 an afternoon trading Monday.