Walgreen Co. reported that profits for the second quarter ended Feb. 28 were up 4.5 percent to $669 million, or 68 cents a diluted share, from $640 million, or 65 cents a share, in the same period a year ago.
On average, Wall Street analysts had expected EPS of 71 cents a share.
Quarterly revenues came in at $16.99 billion, a 3.1 percent rise from $16.48 billion a year ago.
“The unusual pattern of this year’s flu season impacted our overall comparable-sales performance for the quarter,” Greg Wasson, president and chief executive officer of Walgreens, told analysts during a conference call on Tuesday. “Both [prescription] and front-end sales spiked in the first quarter, when the flu hit hard and were relatively weak in the second quarter, when the flu subsided,” he noted.
Comparable-store sales decreased 0.2 percent in the quarter, while front-end comparable-store sales decreased 1.6 percent, the firm stated, adding that front-end sales were impacted in part by continued weak demand for discretionary goods because of the sluggish economy.
Wasson told analysts that new store openings would be slowed in an effort to free up cash for strategic acquisitions, the “most significant” being last month’s purchase of metro-New York drugstore chain Duane Reade. “Acquisitions help us fill in important regions of the country and widen our footprint more quickly than through organic growth,” said Wasson.
Of the 257-store Duane Reade acquisition, which is expected to close this fiscal year, he said, “Finding good real estate in Manhattan is very challenging. It would take us many years of organic growth to reach the store count that this acquisition brings us.” Wasson called beauty an “important department to 75 percent of our customers who are female [and] an area where we intend to grow.” He added that across the retailer’s 7,180 drugstores, “we’re dedicating more space to key categories like skin care and vitamins.”
For the first six months of the fiscal year, profits were up 10.5 percent to $1.16 billion, or $1.17 a share, from $1.05 billion, or $1.06 a share, during the prior-year period, on sales that increased 6.1 percent to $33.35 billion, from $31.42 billion.
Also Tuesday, the Federal Trade Commission said Walgreens agreed to pay almost $6 million to settle allegations of false advertising related to sales of cold and flu remedies similar to the Airborne cold-and-flu treatment. The FTC said Walgreens claimed its line of Wal-Born dietary supplements could prevent colds, fight germs and boost the immune system, claims the commission alleged are false. A portion of the settlement amount, $1.2 million, was already used to pay consumers who were part of a separate class-action suit against the retailer.
Shares Tuesday closed up 58 cents, or 1.6 percent, at $35.91.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)