Deerfield, Illinois, based drugstore Walgreens posted its strongest increase in net income in a decade and its largest growth in earnings per share in more than 15 years. During the Walgreens Annual Shareholders Meeting held yesterday the retailer outlined their strategies for growth and value creation for shareholders. Addressing approximately 2,000 shareholders in Chicago, Chairman Alan G. McNally, President and Chief Executive Officer Gregory D. Wasson and Executive Vice President and Chief Financial Officer Wade D. Miquelon also discussed the substantial progress the company is making toward its goal of becoming America’s first choice for health and daily living.
McNally said, “As our broad-based transformation continued to accelerate and gain momentum, fiscal 2011 was a year of strong performance for Walgreens with record sales and earnings, double-digit growth in earnings per share in all four quarters and a dividend increase of more than 28 percent — the largest in the company’s history.”
Operating in an environment that includes a challenging economy, changing health care system and evolving consumer needs that emphasize value, Walgreens achieved many important milestones in fiscal 2011 while focusing on its core business and delivering even better performance from its more than 7,800 drugstores.
Wasson said, “Our opportunity now is to combine the best locations in America with an outstanding customer and patient experience — what we call the ‘Well Experience.’ Our new pilot drugstore format supports our vision of becoming My Walgreens for everyone in America, the first choice for health and daily living. We are stepping out of the traditional drugstore format and creating something unique, new and special.”
Walgreens latest example of its “Well Experience” stores is its new flagship store that opened on January 9 at the corner of State & Randolph streets in Chicago’s Loop. The store features an enhanced, state-of-the-art pharmacy designed to encourage greater interaction between pharmacists and patients; a Take Care Clinic offering a wide range of health care services including vaccinations, health tests, physicals and treatments for common illnesses and minor injuries; an Upmarket Cafe featuring a juice bar and fresh hand-rolled sushi; and a LOOK Boutique beauty department featuring dozens of prestige and niche cosmetic, skincare and hair care brands not typically found in drugstores. The new store borrows much of the innovations that debuted in the Walgreen owned Duane Reade stores in New York City.
During the meeting, the company also reviewed key highlights and milestones over the past year, which include:
- Building many of Duane Reade’s store design concepts into Walgreens stores across the country as the company leverages the best of the New York City drugstore chain it acquired in April 2010.
- Converting and opening more than 3,700 stores under its “Customer Centric Retailing” initiative, bringing the total to 6,400 stores since the initiative launched in 2009.
- Expanding its answer to “food deserts” — underserved communities lacking ready access to fresh, healthy foods — with a plan to offer an expanded selection of fruits, vegetables and other staples at 1,000 Walgreens stores across the country.
- Launching a new Walgreens private brand, “Nice!” With “Nice!” and Duane Reade’s “Good & Delish,” the company now offers more than 400 high-quality grocery and household private-brand products.
- Bringing its pharmacists out from behind the pharmacy counter to promote more face-to-face conversations and personal interactions with patients in Walgreens new pilot store design.
- Advancing Walgreens leadership in providing flu shots and other immunizations, delivering 6.4 million flu shots last year that made the company the No. 1 flu immunizer in the U.S. other than the federal government.
- Acquiring a leading e-commerce site, drugstore.com, to advance Walgreens multi-channel strategy and build on its core business. As well, Walgreens introduced “Web Pickup” service at Chicago-area stores and San Jose, Calif., locations, enabling customers to shop online and pick up their orders at a store in as little as an hour.
- Completing the sale of its pharmacy benefit management business to Catalyst Health Solutions, Inc., for $525 million, subject to certain adjustments.
- And, exceeding its three-year goal to deliver $1 billion in annual pre-tax savings through the company’s “Rewiring for Growth” initiative.
These and other achievements in 2011 demonstrate the significant progress Walgreens continues to make in advancing and executing the company’s five key strategies toward its vision to become America’s first choice for health and daily living. Those strategies are:
- Transform Walgreens traditional drugstore to a retail health and daily living store.
- Advance community pharmacy to play a greater role in health care through integration and expanded services.
- Deliver an outstanding customer experience through enhanced employee engagement.
- Expand across new channels and markets, particularly through investments in e-commerce and mobile technology.
- And, reinvent its cost structure through continuous improvement and innovation.
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