CHICAGO (Reuters) - Walgreen Co WAG.N posted a smaller-than-expected rise in same-store sales in November, sending shares of the largest U.S. drugstore chain down more than 4 percent.
The company said Thanksgiving weekend was “notably softer” and that weak demand for discretionary goods persisted throughout the month.
Walgreen has updated its stores and increased advertising as it tries to lure shoppers to fill their prescriptions at its drugstores and stock up on general merchandise such as milk, bread and cosmetics.
“While one month is not a trend, (November’s sales) suggest the company’s recent sales initiatives are having trouble gaining traction,” Jefferies & Co analyst Scott Mushkin wrote in a research note. He has a “hold” rating on the shares.
Shares of Walgreen fell 4.3 percent to $37.68.
Sales at stores open at least a year rose 3.9 percent in November, while analysts’ had expected a 6.1 percent increase, according to Thomson Reuters data.
Pharmacy same-store sales rose 5.7 percent, while analysts were looking for a 7.2 percent jump.
The number of prescriptions filled at comparable stores rose 7.4 percent, aided by more patients filling 90-day prescriptions, which count as three prescriptions in the month that they are sold.
Same-store sales at the front end of the store, where Walgreen sells general merchandise, rose 0.8 percent. Analysts, on average, had expected a 3.8 percent increase.
Demand for cough, cold and flu products slowed versus the previous two months, Walgreen said. Thanksgiving weekend was also notably softer, and weakness in demand for discretionary goods persisted throughout the month, the company added.
Total November sales rose 8.7 percent to $5.36 billion. Sales for the first quarter of the company’s fiscal year climbed 9.5 percent to $16.36 billion, topping analysts’ average forecast of $16.26 billion, according to data from Thomson Reuters I/B/E/S.
Reporting by Jessica Wohl, editing by Gerald E. McCormick, Dave Zimmerman