The company previously estimated its accretion related to the Alliance Boots investment for fiscal year 2013 would be 23 to 27 cents per diluted share. As a result of a one-quarter rather than a one-month reporting lag period, the company estimates that the accretion over the last three quarters of fiscal 2013 will be an adjusted 25 to 29 cents per diluted share, and an adjusted 18 to 22 cents for the full fiscal year. These estimates do not include amortization expense or one-time transaction costs, and reflect the company’s current estimates of IFRS to GAAP conversion and foreign exchange rates.
First quarter sales decreased 4.6 percent from the prior-year quarter to $17.3 billion. Brand-to-generic prescription drug conversions negatively impacted sales by $883 million or 4.9 percentage points in the first quarter.Front-end comparable store sales (those open at least a year) decreased 2.0 percent in the first quarter compared to the prior-year quarter, customer traffic in comparable stores decreased 4.2 percent and basket size increased 2.2 percent. Prescription sales, which accounted for 63.8 percent of sales in the quarter, decreased 7.2 percent compared to the year-ago quarter, while prescription sales in comparable stores decreased 11.3 percent. The company filled 201 million prescriptions, a decrease of 3.2 percent over last year’s first quarter. Prescriptions filled in comparable stores decreased 4.8 percent in the quarter, an improvement of 3.2 percentage points from the 8.0 percent decrease in the fourth quarter of fiscal 2012. The improvement was due primarily to the company’s return to the Express Scripts, Inc. pharmacy network on Sept. 15. Total sales in comparable stores decreased 8.0 percent. Gross Profit and SG&A Total gross profit dollars in the first quarter decreased $5 million, or 0.1 percent, compared with the year-ago quarter, with LIFO gross profit margins increasing to 29.4 as a percentage of sales versus the year-ago quarter of 28.1. The growth in margins was driven primarily by an increase in generic prescription drugs dispensed. Front-end margins remained firm even as the company made gross profit margin investments through reward points for its Balance Rewards program throughout the quarter. In addition, Walgreens private brand products increased in share 2.0 percentage points over the year-ago quarter to 22.0 percent. The LIFO provision was $55 million in this year’s first quarter versus $45 million last year.
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