Walgreen Co. on Monday posted its biggest profit
increase in four quarters, as sales of generic drugs rose and the
company gained customers from a new Medicare prescription plan.
The nation's largest drugstore chain by revenue
said third-quarter net income climbed 14 percent, to $469.2 million,
or 46 cents a share, beating estimates by 2 cents a share. A year
ago, the Deerfield-based company earned $411 million, or 40 cents
a share.
The profit increase "was a solid number and
better than expected," said Don Gher, chief investment officer
at Bellevue, Wash.-based Coldstream Capital Management Inc. "Walgreen
continues to deliver on their long-term expansion plan while also
providing solid near-term earnings."
Revenue in the most recent period increased 12
percent, to $12.18 billion. Same-store sales, or sales at stores
open at least a year, gained 7.6 percent, as Walgreens sold more
higher-margin generic drugs and shoppers bought more over-the counter
medications. Same-store sales are considered the best indicator
of a retailer's health.
Walgreens gained market share in 57 of its top
59 product categories in non-pharmacy sales in the quarter, said
Rick Hans, the company's director of finance.
The earnings report was the last one presided over
by David Bernauer, who will step down as chief executive on July
12. He will be succeeded by President and Chief Operating Officer
Jeffrey Rein, a 24-year veteran of Walgreens. Rein is a pharmacist
who worked his way up from assistant manager after joining the company
in 1982.
Shares of Walgreens gained 49 cents, to close Monday
at $44.10 on the New York Stock Exchange.
