Walgreen posted a greater-than-expected 9.3% rise in sales at stores open at least a year in November, sending its shares up more than 3%.
The increase came as sales of prescription medications rose despite the $4 generic plan in place at Wal-Mart Stores and other low-priced chains.
Analysts, on average, had expected the largest U.S. drugstore chain by revenue to post a 9.1% rise in same-store sales, according to research firm Retail Metrics.
Total sales rose 16.2% to $4.36 billion.
Pharmacy same-store sales rose 11.4% while same-store sales of general, or front-end merchandise rose 5.7%.
Prescription sales accounted for 64.5% of sales in the month, Deerfield, Illinois-based Walgreen said.
For the company's fiscal first quarter, sales rose 16.6% to $12.71 billion. Analysts on average had forecast $12.48 billion, according to Reuters Estimates.
Walgreen has higher annual sales than rival CVS, but fewer stores. CVS operated 6,197 stores as of November 25, while Walgreen had 5,515 stores as of October 31.
Neither chain has matched Wal-Mart's plan to fill monthly prescriptions for some generic drugs for $4, which the world's largest retailer started rolling out in September.
Walgreen shares rose $1.30 to $41.57 on Monday morning on the New York Stock Exchange. Before Monday, the stock had fallen more than 19% since Wal-Mart first announced its $4 generic drug plan.