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Walgreens April Sales Decrease 3.7 Percent

Walgreens (NYSE: WAG) (NASDAQ: WAG) had April sales of $5.78 billion, a decrease of 3.7 percent from $6.0 billion for the same month in fiscal 2011.

Total front-end sales decreased 0.5 percent compared with the same month in 2011, while comparable store front-end sales decreased 2.2 percent. Customer traffic in comparable stores decreased 3.0 percent while basket size increased 0.8 percent.

For the combined March/April period that includes the Easter holiday season, comparable store front-end sales decreased by 0.5 percent, while customer traffic in comparable stores decreased 2.3 percent and basket size increased 1.8 percent.

Prescriptions filled at comparable stores decreased 7.8 percent in April. Calendar day shifts in April, which had one additional Sunday and Monday, and one fewer Friday and Saturday compared with April 2011, positively impacted prescriptions filled in comparable stores by 0.6 percentage point. On a calendar-adjusted basis, prescriptions filled at comparable stores improved for the third consecutive month, including a 0.9 percentage-point improvement in April compared with March.

Lower incidence of flu negatively impacted comparable store prescriptions filled in April by 0.2 percentage point. The negative impact on comparable store prescriptions filled due to no longer being part of the Express Scripts, Inc. pharmacy network was 10.7 percentage points. Prescriptions processed by Express Scripts comprised 12.6 percent of Walgreens prescriptions in April 2011.

“We’ve seen month-to-month improvement in comparable prescriptions filled on a calendar adjusted basis each of the last three months, while our front-end business reflects our continued focus on a more relevant product mix, supported by a new advertising circular strategy that launched in February with continued pricing and promotion discipline,” said Walgreens Executive Vice President and CFO Wade Miquelon.

April pharmacy sales decreased 6.3 percent, while comparable store pharmacy sales decreased 8.9 percent. Calendar day shifts positively impacted pharmacy sales in comparable stores by 0.6 percentage point. Comparable store pharmacy sales also were negatively impacted by 3.4 percentage points due to generic drug introductions in the last 12 months, by 0.5 percentage point due to lower incidence of cough, cold and flu and by 10.7 percentage points due to no longer being part of the Express Scripts network. Pharmacy sales accounted for 62.6 percent of total sales for the month.

Sales in comparable stores decreased by 6.4 percent. The effect of calendar day shifts positively impacted total comparable sales by 0.4 percentage point.

Sales for the combined months of March and April 2012 decreased 4.0 percent from the same two months in 2011. Comparable store sales for the March/April period decreased 6.7 percent.

Calendar year-to-date sales were $23.46 billion, a decrease of 2.2 percent from $24.0 billion in the same period in 2011.

Fiscal 2012 year-to-date sales for the first eight months were $48.61 billion, up 1.0 percent from $48.14 billion in the same period in fiscal 2011.

Walgreens opened seven stores during April, including one relocation, and acquired two stores.

At April 30, Walgreens operated 8,307 locations in all 50 states, the District of Columbia, Puerto Rico and Guam. That includes 7,855 drugstores, 146 more than a year ago, including 21 stores acquired over the last 12 months. The company also operates infusion and respiratory services facilities, specialty pharmacies and mail service facilities. Its Take Care Health Systems subsidiary manages more than 700 in-store convenient care clinics and worksite health and wellness centers.

   
April Comparable Sales and Prescriptions Filled
     

Calendar

 

Cough,

Shift

Generics

Cold, Flu

Reported

Impact

Impact

Impact

 
Total Comp Sales -6.4% 0.4% -2.1% -0.3%
 
Comp Front End -2.2% - - -
 
Comp Rx Sales -8.9% 0.6% -3.4% -0.5%
 
Comp Rx Scripts

-7.8%*

0.6% - -0.2%

* Includes +3.3 percentage points from patients filling more 90-day prescriptions

Please note: Sales numbers and the adjustments shown in the table are preliminary, unaudited and subject to revision. Comparable stores are defined as those drugstore locations open for at least 12 consecutive months without closure for seven or more consecutive days and without a major remodel or a natural disaster in the past 12 months. Acquired operating locations and relocations are not included as comparable stores for the first 12 months after the acquisition or relocation.

Cautionary Note Regarding Forward-Looking Statements: Statements in this release that are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "expect," “likely,” "outlook," “forecast, "would," "could," "should," “can,” “will,” "project," "intend," "plan," "continue," "sustain," "on track," "believe," "seek," "estimate," "anticipate," "may," “possible,” "assume," and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, changes in vendor, payer and customer relationships and terms, competition, industry consolidation and the effects thereof, changes in economic and business conditions, risks associated with new business and business retention initiatives and activities, failure to obtain new contracts or extensions of existing contracts, risks associated with acquisitions, joint ventures and divestitures, the ability to realize anticipated results from capital expenditures and cost reduction initiatives, and outcomes of legal and regulatory matters. These and other risks, assumptions and uncertainties are described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each of which is incorporated herein by reference, and in other documents that we file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, Walgreens does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the date of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

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