Walgreen 4Q Profit Slips

Deerfield, Ill., Shares of Walgreen Co. tumbled Monday after the usually solid retailer’s fourth-quarter fell sharply short of expectations, causing its first earnings decrease in nearly a decade. Profit slipped nearly 4%, sliding to $396.5 million from $412.3 million a year ago.

Quarterly revenue for the three months ended Aug. 31 rose more than 10% to $13.4 billion from $12.2 billion. Same-store sales grew 6.3% during the fourth quarter. Comparable prescription sales grew 6.5%, while same-store sales of other non-pharmacy items grew 6.1%.

Walgreen blamed its poor performance on lower reimbursements for popular generic medications and higher salary and store expenses.

“This quarter was negatively impacted by lower generic drug reimbursements, combined with higher salary and store expenses, and higher advertising costs,” said Walgreen chairman Jeffrey Rein. “Our expenses weren’t in line with the level of reimbursements we were receiving. Managing both expenses and lower reimbursements on some generic drugs is my top priority. We’re going to fix this, and at the same time continue our aggressive growth plan,” he said.

In other news, Walgreen said it would open Take Care Health Systems clinics in nine new markets this fall, according to Tampa Bay Business Journal.

Take Care clinics are staffed by nurse practitioners and open extended hours and weekends. The clinics provide treatment for common conditions and have charges ranging from $59 to $74.

Take Care currently has 63 clinics in Walgreens stores. The company expects to have 400 by the end of 2008.