Same-store sales at Walgreen Co. (WAG) rose 2% in June, compared with 2009 June sales, and total sales for the month rose to $5.67 billion, up 8.4% from the same period a year ago. The recently acquired Duane Reade stores are included in total sales but not in the comparable sales.

June sales reversed a decline in same-store sales that had troubled Walgreens for the past two months. May 2010 sales were down 1.9% from a year ago, and April sales were down 0.2%. The Duane Reade acquisition closed in April and helped boost total sales for the two months, but, again, were not included in comparable sales.

Competitor Rite Aid Corp. (RAD) last week reported a same-store sales drop of 2.5% in June. Another drug store chain, CVS/Caremark Corp. (CVS), has not yet reported June sales.

Both Walgreens and Rite Aid noted that comparable pharmacy sales slid in June due to the introduction of generic drugs replacing patented drugs in the past 12 months. Both chains also noted a drop in sales for flu medicine.

The changeover from patented to generic drugs generally helps drug store chains because their profit margins on generics could double. The largest impact from the switch is expected next year when patent protection expires on both Lipitor and Plavix. Gross margins on generics can go as high as 48%, compared with gross margins on branded drugs of around 9%.

Walgreens also benefited in total sales from its acquisition of Duane Reade stores. Duane Reade had more than 250 stores in New York City, and the number of Walgreen stores in the US now totals more than 8,000, up from about 7,100 when the acquisition was announced.

Walgreens also settled a dispute with CVS/Caremark over pharmacy benefits management that threatened to eliminate 7% of Walgreen’s annual revenue. While the companies did not publicize the terms of the agreement, it’s very likely that Walgreens got the boost in payments that it wanted. Just the fact that Walgreen’s preserved about $4.5 billion in annual revenues brought the company a ratings outlook boost from ‘negative’ to ‘stable’ from Moody’s.

Walgreens should be able to keep up its sales growth now that the deal with CVS/Caremark is settled, and it should grow its overall revenues now that the acquisition of Duane Reade is complete. The stock is up nearly 3% in early trading today.