updated - October 24, 2020 Saturday EDT
Walgreens saw its fourth quarter profit rise 86 percent thanks to an increase in customer loyalty card sales.
"Fixing front-end traffic has been a priority for management, with the company now starting to see benefit from balance rewards," Deborah Weinswig an analyst at Citigroup Inc. in New York said in a note Sunday Bloomberg reported.
The company's net income increased to $657 million or 69 cents a share from $353 million or 39 cents a share during the same quarter last year. Not including certain items, profit was 73 cents a share, which matched analysts' estimates Bloomberg reported.
Walgreens Chief executive officer Gregory Wasson compiled data from purchases made by loyalty card holders in order to improve merchandise offerings in the front of Walgreens stores. Sales at stores opened at least 12 months increased 4.6 percent as the average purchase size went up 3.6 percent. In total sales rose 5.1 percent to $17.9 billion.
Company shares dropped 1.3 percent to $53.80 Monday. This year however, shares increased 45 percent showing an 18 percent gain according to the Standard and Poor's 500 Index.
The Walgreen's loyalty card program is the company's way to lure customers back into its stores from its competitors in CVS, and Rite Aid who also have a similar program The Chicago Tribune reported. Customers can take advantage of sales and promotions while at the same time accumulating rewards points on certain purchases for savings in the future the company said on its website. The program, which requires participants to show their card when buying items, is available at participating Walgreens Drugstore, Rxpress, Duane Reade, USA Drug or Walgreens Pharmacy locations.
Walgreens occasionally has special program offers that will are not available in all stores.
Walgreens did not have a program for several years.
However after employees tested it out for a year and a half after experiencing a decrease in the number of their shoppers who had to find other pharmacies in order to fill "express scripts" prescriptions, the company made one of the biggest changes since it was established 111 years ago the company's website said.
TOP 10 FRANCHISES OF 2020