Reuters

(Reuters)

Walgreens Books Higher Sales, Closes on Drugstore.com Buy

By Markets FOXBusiness

Just as it completed its $409 million drugstore.com buy, Walgreens (WAG) said Friday that its third-quarter sales climbed 6.8% in May from the year-earlier period as customers filled more prescriptions and increased their basket volumes.

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Walgreens completed the acquisition of drugstore.com on Friday, marking its biggest buy since it bought rival Duane Reade last year. 

The retailer has said drugstore.com adds a strong online business to Walgreens, better positioning it as one of the more convenient multi-channel retailers of health and daily living.

The acquisition provides the company a unique opportunity to access more than 3 million savvy, online loyal customers, Walgreens CEO Greg Wasson said in a statement.

It also enables the company to move closer to its existing customers through relationships with new vendors and partners, he said, including the addition of about 60,000 products.

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Walgreens president of e-commerce, Sona Chawla, will lead the combined e-commerce business, while drugstore.com CEO Dawn Lepore will continue through the transition period as a strategic advisor. The website will maintain separate branding of its websites, though Walgreens said it will fully integrate the two businesses overtime.

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The deals close comes just as the retailer reported third-quarter sales of $18.38 billion, up 6.8% from $17.20 billion in the same quarter last year, narrowly beating the Streets view of $18.3 billion.

For the three months ended May 31 sales at comparable stores, or those open more than a year, were up 4.1%, while front-end comparable store sales increased 3.9%. Prescriptions filled during the period jumped 4.5%, lifting total comparable pharmacy sales 4.2%.

The Deerfield, Ill.-based chain drugstore said sales in May were $6.08 billion, up 7% from $5.69 billion a year ago. Total front-end sales grew 5.5% in the four-week period, while comparable sales in that part of the store increased 3.6%.

About 1.6% more customers visited the store last month, and basket sizes were a total of 2% larger. Prescriptions filled at comparable stores climbed 7.1%, helping to lift total pharmacy sales by 7.8%, which was partially offset by generic drug introductions.

Last month, Walgreens opened 12 stores, acquired one, and closed two.

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