Yesterday Deerfield, Illinois based drugstore Walgreens held its Annual Shareholders’ Meeting. Chairman Alan G. McNally, President and Chief Executive Officer Gregory D. Wasson, and Executive Vice President and Chief Financial Officer Wade D. Miquelon reviewed the company’s performance and substantial progress throughout 2010, and outlined opportunities to grow and enhance value for shareholders, those opportunities included a Private Brand. They also discussed the significant steps the company is taking to achieve its goal of being America’s most trusted and convenient provider of consumer goods and services, and pharmacy, health and wellness solutions.
“The center of our growth has always been the pharmacy”
McNally said, “Since Greg Wasson’s appointment as CEO nearly two years ago, he has successfully led one of the most important strategic and operational transformations in Walgreens 110-year history. Greg has assembled a world-class leadership team and fostered a culture of innovation and operating excellence. Record free cash flow enabled us to return a record $2.2 billion to shareholders last year through dividends and share repurchases. This included a dividend increase of 27 percent last July, marking the 35th consecutive year that Walgreens increased its dividend and bringing our compound annual growth in dividends for the past eight years to nearly 22 percent.”
Looking at the business environment, Wasson said, “Walgreens intends to benefit from the growing convergence of health care and retail services. Consumers today have greater access to health care information than ever before, allowing them to become more responsible for their own health and wellness decisions. As a result, patients are increasingly becoming shoppers of health care. That is a very favorable development for Walgreens as we evolve our business from the traditional retail drugstore model toward being America’s No. 1 choice for health and daily living needs by offering the most comprehensive pharmacy, health and wellness solutions to patients and health care payers. With 32 million more Americans gaining access to health care coverage in 2014, we see substantial opportunities ahead.”
Additional key highlights and milestones over the past year include:
- Sales for the fiscal year were a record $67.4 billion, a 6.4 percent increase, while operating income reached a record $3.5 billion.
- Walgreens acquired 258 Duane Reade drugstores in the New York City metro area, the largest acquisition in its history. Other acquisitions included Snyder’s Drug Stores in Minnesota, Ike’s and Super D drugstores in the Memphis area, and Eaton Apothecary pharmacies in the Boston area.
- More than 2,200 stores now feature the company’s Customer Centric Retailing format, which has been well received by customers. Plans call for completion of the CCR rollout
- Walgreens was named to Fortune magazine’s list of Most Admired Companies in America for the 17th consecutive year, and was ranked 32nd on the Fortune 500 list of the largest U.S.-based companies. In addition, Fast Company magazine ranked Walgreens as the sixth most innovative health care company for leadership in health care services.
“With more than 7,600 locations within three miles of 63 percent of all Americans, our drugstores are our center of gravity,” said Wasson. “Our strategy is to leverage the best store network in America, enhance the customer experience and achieve major cost reduction and productivity gain. Implementing those strategies is creating substantial growth opportunities for our company.”
Those opportunities include:
- Slowing new store openings gives Walgreens the opportunity to improve returns on capital and focus on enhancing performance at its existing stores, while continuing to take advantage of the right strategic growth opportunities in both its retail and pharmacy, health and wellness businesses.
- With its CCR initiative, designed to enhance the look and feel of the stores with new product assortments, better sightlines and a new in-store décor package, scheduled for completion by the end of calendar 2011, Walgreens is moving forward with additional front-end opportunities including: enhancing its private brand products; expanding fresh food offerings; and piloting upscale beauty departments and a customer loyalty initiative.
McNally concluded, “We continue to leverage our core strengths developed over more than a century – the best, most convenient store network in America; our trusted and iconic brand; and our strong balance sheet and financial flexibility. These great strengths serve as the bedrock for our company’s transformation, and provide Walgreens the opportunity for sustained growth and value creation as we emerge from the Great Recession and continue to address our nation’s growing health care needs.”