Walgreen Q1 profit falls 4.5%, misses Street

Deerfield, Ill. -- Walgreen Co. reported Wednesday that profit for the quarter ended Nov. 30 dropped 4.5% to $554 million, compared with $580 million in the year-ago period. The drugstore operator cited a slow flu season and the decision to leave Express Scripts pharmacy network among the reasons for the performance dip.

Revenue for the quarter climbed 4.7% to $18.16 billion – a chain sales record – but missed Wall Street’s forecasted $18.24 billion in revenue. Total same-store sales rose 2.5%; front-end comps increased 2.4%.

Walgreens said it has made no progress in its negotiations with pharmacy benefits manager Express Scripts, and the Jan. 1 severance date continues to loom. If Walgreens stops doing business with Express Scripts on Jan. 1, it stands to lose billions of dollars in annual sales.

During the quarter, the company opened or acquired 71 new drugstores (a net gain of 51 after relocations and closings), compared with a net gain of 89 a year earlier.