Walgreen Q2 profit rises, misses Street

Deerfield, Ill. Walgreen Co. reported Tuesday that quarterly earnings rose in the second quarter, helped by stronger prescription drug sales and healthier margins.

The drug store retailer recorded a 4.5% rise in profit for the quarter ended Feb. 28, to $669 million from $640 million in the year-ago period. Earnings fell short of Wall Street expectations. Second-quarter results included ongoing restructuring costs.

Sales rose 3.1% to $16.99 billion, just short of analysts’ estimates of $17.17 billion.

Same-store sales dipped 0.2%. 

The company said a weak flu season hampered sales of cough, cold and flu-related products. However, margins improved in the quarter as the company stocked fewer seasonal goods, and was not forced to mark them down to the same extent as a year ago. And prescription revenue increased 3.2% as more customers filled 90-day prescriptions.

The company is in the midst of buying New York City drug store chain Duane Reade, as part of a deal announced in February. When completed, the deal will make Walgreen the leading drug store operator in the city.

Walgreen acquired or opened 41 stores during the quarter. At the end of February, it ran 7,180 stores in all 50 states, along with Puerto Rico; Guam; and Washington, D.C. The company also has 500 worksite health centers, home care facilities, and specialty and other pharmacies.