Walgreen Co. posted record earnings and sales for its fiscal third quarter ended May 31, although its profit growth was restrained by store remodeling costs and tax law changes.
Net income rose 5 percent, to $25.3 million, or 42 cents a share, from $24.1 million, or 39 cents a share, in the year-earlier period.
The year-earlier quarter included an investment tax credit of $1.4 million, or 2 cents a share. There were no comparable credits in the current period, reflecting changes last year in the federal tax code.
Quarterly sales rose 17 percent, to $1.07 billion from $913.9 million.
Charles R. Walgreen III, chairman of the Deerfield drugstore and restaurant chain, said the latest results were held down by remodeling and start-up costs for 66 Medi Mart stores acquired last year.
President Fred F. Canning said the company`s drugstore division posted an 18 percent increase in sales in the third period, paced by the prescription business.
For the first nine months, net income rose to a record $77.3 million, or $1.26 a share, from $76.9 million, or $1.25 a share, in the year-earlier period. The company said tax law changes reduced its earnings in the latest nine months by $3.8 million, or 6 cents a share.
Nine-month sales advanced 17 percent, to $3.21 billion from $2.73 billion.
The company said it has opened 71 drugstores this fiscal year and anticipates opening another 29 before the year closes on Aug. 31.
