Walgreen's sales metric beats estimates

Deerfield-based Walgreen said Wednesday that a key sales measurement posted a solid gain in January.

The nation's biggest drugstore operator said sales at stores open at least a year grew 2.9 percent for the month, mostly because revenue from pharmacy departments improved. At stores open at least one year, pharmacy revenue rose 3.7 percent and sales of non-pharmacy items sold at the front of its stores increased 1.6 percent.

Analysts surveyed by Thomson Reuters expected combined growth of 1.7 percent.

The metric is viewed as an important measurement of retailer health. It excludes potentially distorting results from stores that have opened or closed within the last year.

Walgreen says it has given more than 7.5 million flu shots at pharmacies and clinics so far this season, up from 6.9 million a year ago.

The company said its total sales grew 3.7 percent to $6.39 billion in January. Pharmacy revenue rose 4.6 percent and front-end sales grew 2.4 percent. Walgreen said customer traffic decreased, but shoppers spent more money.

Walgreen Co. had 8,678 drugstores as of Jan. 31. The company has locations in 50 states, Washington DC, Puerto Rico, Guam, and the U.S. Virgin Islands.

The results come as its rival CVS Caremark announced it will quit selling tobacco products at its more than 7,600 drugstores nationwide by Oct. 1 as it focuses on providing health care.

CVS said Wednesday that it will phase out cigarettes, cigars and chewing tobacco, a move that will cost about $2 billion in annual revenue but won't affect its 2014 earnings forecast. CVS Caremark leaders say removing tobacco will help them grow the company's business of working with doctors, hospitals and other care providers to improve customers' health.