Walgreen Co. (NYSE:WAG) is the nation’s second largest pharmacy chain that needs no introduction. What you may not know is that it operates 8,683 locations in all 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. The company has 8,217 drugstores nationwide, 120 more than at this time a year ago. Besides pharmacy services, Walgreens also operates worksite health and wellness centers, 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. Walgreens’ e-commerce business includes Walgreens.com, Drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com. The stock caught my eye on Tuesday, as it is down 3 percent on the back of disappointing earnings. The question is should we take advantage of the small selloff and do some buying, or should we abandon ship and take profits? To address this issue, let’s walk through the important aspects of the quarter.
The first thing you need to know is that third-quarter sales were up year over year. In fact, they increased 5.9 percent compared with the prior-year quarter to $19.4 billion. Comparable store sales were also up. They increased 2.2 percent in the third quarter, while customer traffic in comparable stores decreased 0.7 percent. Despite reduced customers, the average basket size per customer increased 2.9 percent. The Walgreens Balance Rewards loyalty program hit a new milestone, as well.