Magazine article Drug Topics

Sales Still Robust, despite Still Competition, Walgreens Reports

Magazine article Drug Topics

Sales Still Robust, despite Still Competition, Walgreens Reports

Article excerpt

Walgreens closed out the 20th century with its first $1 billion month in pharmacy sales in December.

It also racked up one million prescriptions filled each weekday during the month, the company announced at its annual stockholders' meeting in Chicago. Rxs led the way to record sales and earnings for the first fiscal quarter, ending November 30.

Sales increased 20.1% to $4.8 billion, and earnings were up 22.9% to $128 million, or 13 cents a share for the quarter. Prescription sales climbed 26.3% and accounted for 55.3% of the quarterly sales, the company reported. In comparable stores, sales rose 20.7%.

CEO L. Daniel Jorndt described the prescription business as "the No. 1 loyalty business in our stores." He identified photo finishing as the No. 2 loyalty business. Third-party plans now account for 85% of pharmacy sales, he said.

To provide perspective, Jorndt told the stockholders that the company's first billion-dollar prescription year was in 1987. And its first billion dollar year for total sales was 1975.

The company expects to open its 3,000th store this spring and has a goal of 6,000 stores by the year 2010. It currently operates 2,894 stores in 40 states and Puerto Rico, an increase of 272 over one year ago. It plans to open 350 new stores, replace 100 old ones this year, and enter 16 new markets in three new states-Maryland, Utah, and Wyoming.

The drug chain is also continuing to take a look at expanding to other countries but feels under no immediate pressure to do so. "It's not necessary for us to go international for 10 to 15 years," Jorndt said at a news conference following the meeting. "But we want to get ready before we need to. It is not a crash program. We are taking our time."

The dominant subject at the news conference was the company's experience with and plans for the Internet, which were also discussed at the general meeting. Walgreens president David Bernauer told stockholders that the company is processing more than 2,000 prescriptions a day through its Web site. Most of these, he noted; involve persons using the Internet instead of the telephone to place their order, which they then go to the store to pick up, although Walgreens does pick up the cost for mail delivery. He and Jorndt predicted that the Internet and brick-and-mortar stores would coexist, and both would flourish. But Jorndt said he believes the most important role of the Internet will be information related rather than sales related. …

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