Last winter's bad flu season may help drugstores this fall by motivating more customers to get preventive shots, according to a Credit Suisse analyst who covers the industry.
An increase in flu shots helped both Walgreen Co. and Rite Aid Corp. top Wall Street expectations for sales last month, according to analyst Edward J. Kelly.
Walgreen, the nation's largest drugstore chain, said Thursday its revenue from stores open at least a year climbed 7.4 percent last month. That included a 10.2 percent jump in pharmacy revenue. The Deerfield, Ill., company said it administered 1.9 million flu shots, up from 1.6 million in September, 2012.
Rite Aid's revenue from established stores climbed 1.9 percent. Analyst Edward J. Kelly said an increase in flu shots helped the Camp Hill, Pa., company's pharmacy revenue rise 3.1 percent. The pharmacy performance beat Kelly's forecast of a 2.7 percent increase.
Rite Aid is the nation's third-largest drugstore chain. The second-largest, CVS Caremark Corp., doesn't report monthly revenue.
"Drugstores may benefit from earlier flu shots this year as consumers are more cautious following last year's heavy flu season," Kelly wrote in a research note.
Flu shots and immunizations for other illnesses like pneumonia have become a growing business for drugstores for several years now.
Federal health officials recommend a yearly flu vaccine for nearly everyone, starting at 6 months of age. Flu strains continually evolve, and the recipe for each year's vaccine includes the subtypes of those strains that experts consider most likely to cause illness that winter.
These vaccines offer protection against three influenza strains, but this year, some will protect against four.
Last year's flu season arrived earlier than usual, and the virus that struck was one that could make people sicker. By mid-January, at least 29 children or teens had died from the flu-related causes, nearing the 34 pediatric deaths for all of the previous year's flu season.
But drugstores said their flu-related business leveled off after that.
Shares of Rite Aid climbed 8 cents to $5.16 Friday before markets opened, while Walgreen and CVS shares remained unchanged.