Walgreen Co. reported Monday its first-quarter profits rose 19 percent in the quarter ended Nov. 30.
This story first appeared in the December 22, 2009 issue of WWD. Subscribe Today.
Net income rose to $489 million, or 49 cents a diluted share, from $408 million, or 41 cents, in the year-ago period. On average, Wall Street analysts had expected earnings per share of 48 cents, according to Yahoo Finance.
Quarterly revenues reached $16.36 billion, increasing 9.5 percent from $14.95 billion a year ago. Same-store sales were up 4.9 percent.
“We’re extremely pleased to report solid, double-digit earnings growth,” said Greg Wasson, president and chief executive officer of Walgreens. “We remain confident we can continue to generate strong cash flow, which provides us the financial strength and flexibility to continue investments in our core strategies while returning cash to shareholders.”
Cash flow from operations for the quarter more than tripled over last year’s quarter to $1.2 billion, the firm stated, driven by improved working capital and drugstore performance.
Prescription sales accounted for 66.2 percent of quarterly sales and climbed 10 percent. Prescription sales in comparable stores were up 6.1 percent. Front-end comparable-store sales were up 2.7 percent.
Front-end and pharmacy sales were given a lift from September through November by a flu shot campaign that launched Sept. 1, a month earlier than last year, the company noted, adding that it administered 5 million shots by the end of November, compared to 1.2 million during the entire previous flu season.
“Consumer concerns over high unemployment and the challenging economy were a drag on holiday sales at the end of November, and we’ve seen a similar pattern through mid-December,” stated Wasson. “Like every Christmas season, our performance is driven by the final days, which makes this an important week.”
Walgreens opened or acquired 172 new stores in the quarter, compared to 212 in the same period a year ago and, as of the end of November, operated 7,147 drugstores. The retailer said it expects organic store growth of between 4.5 and 5 percent in fiscal 2010 and between 2.5 and 3 percent annually beginning in 2011.