Walgreen profits surge 12%

Walgreen Co. said Monday higher sales and cost-cutting boosted its fiscal fourth-quarter profit 12% amid a difficult economic environment.

Profit for the quarter ended Aug. 31 increased to $443 million, or 45 cents per share, from $396.5 million, or 40 cents per share, a year earlier.

Results include a $79 million vacation accrual adjustment. Revenue rose 9% to $14.6 billion from $13.42 billion last year.

Analysts polled by Thomson Reuters expected a profit of 45 cents per share on revenue of $14.67 billion.

Sales in stores open at least one year, a key retail metric known as same-store sales, rose 2.6% during the quarter, including a 3.7% rise in front-end, or nonprescription sales.

Deerfield, Ill.-based Walgreen (WAG, Fortune 500) said it increased promotions and discounts to combat economic weakness. Those moves increased sales, but not to the degree Walgreen had hoped, and the company said it will reduce promotions.

For the full fiscal year, Walgreen earned $2.16 billion, or $2.17 per share, on $59.03 billion in sales. It opened or acquired 561 stores, giving it 6,443 locations in 49 states; Washington, D.C.; and Puerto Rico. Walgreen plans to open 495 new stores in fiscal 2009.

The company made no comment on its efforts to buy California-based rival Longs Drug Stores Corp. Walgreen has offered $2.8 billion, or $75 per share, for the company, which would give Walgreen a larger presence in California and Hawaii.

Longs management prefers a bid from CVS Caremark Corp. worth $2.7 billion, or $71.50 per share, which has already received regulatory approval.
Walgreen Co. said Monday higher sales and cost-cutting boosted its fiscal fourth-quarter profit 12% amid a difficult economic environment.

Profit for the quarter ended Aug. 31 increased to $443 million, or 45 cents per share, from $396.5 million, or 40 cents per share, a year earlier.

Results include a $79 million vacation accrual adjustment. Revenue rose 9% to $14.6 billion from $13.42 billion last year.

Analysts polled by Thomson Reuters expected a profit of 45 cents per share on revenue of $14.67 billion.

Sales in stores open at least one year, a key retail metric known as same-store sales, rose 2.6% during the quarter, including a 3.7% rise in front-end, or nonprescription sales.

Deerfield, Ill.-based Walgreen (WAG, Fortune 500) said it increased promotions and discounts to combat economic weakness. Those moves increased sales, but not to the degree Walgreen had hoped, and the company said it will reduce promotions.

For the full fiscal year, Walgreen earned $2.16 billion, or $2.17 per share, on $59.03 billion in sales. It opened or acquired 561 stores, giving it 6,443 locations in 49 states; Washington, D.C.; and Puerto Rico. Walgreen plans to open 495 new stores in fiscal 2009.

The company made no comment on its efforts to buy California-based rival Longs Drug Stores Corp. Walgreen has offered $2.8 billion, or $75 per share, for the company, which would give Walgreen a larger presence in California and Hawaii.

Longs management prefers a bid from CVS Caremark Corp. worth $2.7 billion, or $71.50 per share, which has already received regulatory approval.