New York, NY, United States (4E) – Walgreen Co. reported lower profit in its fiscal second quarter due to weaker margins related to a milder flu season and a decline in generic drug introductions.
The drug-store operator’s profit was $754mn, or 78 cents per share, for the period ended Feb. 28, lower than the $756mn, or 79 cents a share, a year ago. Adjusted earnings, which exclude acquisition-related effects and other items, dropped to 91 cents from 96 cents. Analysts predicted per-share earnings of 93 cents.
Adjusted earnings in the latest quarter included a contribution of eight cents per share from Alliance Boots, which is at the high end of Wallgreen’s estimates.
Total drugstore sales climbed 5.1 percent to $19.61bn, according to the company, which is higher than analysts’ expectations at the time.
Same-store sales gained 4.3 percent, including an improvement of 2 percent in the front of the store and a 5.8 percent rise in the pharmacy section. Same-store customer traffic declined 1.4 percent, while basket size rose 3.4 percent.
The company also said it plans to close down 76 drugstores in the second half of the year, a reversal from its rapid expansion in recent years. For this year, Walgreen still expects its store count to rise by 55 to 75 stores.