Helped by a surge in prescriptions for everything from heartburn to obesity, Walgreen Co. continued to outdo itself, posting another quarter of record sales and earnings.
Results for the company’s fiscal third-quarter were helped by tight inventory controls as well as a decline in overhead expenses at the Deerfield-based drugstore chain. But driving the top line was a 22 percent increase in prescription sales that reflects the aging of the U.S. population, Walgreen executives say.
The good report card was in line with analyst expectations for the nation’s largest drugstore chain.
“Walgreen Co. keeps doing what it does best: trouncing competitors’ performance and growing like wildfire,” said Morningstar analyst Roz Bryant.
Walgreen is on track to open 475 new stores this year and is ahead of schedule to have 6,000 stores by 2010, said Chairman Dan Jorndt. The expansion push comes as rivals CVS Corp. and Rite Aid Corp. are closing unprofitable stores to boost their bottom lines.
Investors accustomed to the company’s strong performances were unimpressed. Walgreen stock fell $1.18 per share to close at $37.05, below its 52-week high of $40.70.
In the quarter ended May 31, Walgreen’s net income rose 21 percent to $259.0 million, or 25 cents per share, compared with earnings of $213.4 million, or 21 cents per share, in the same period last year.
Sales rose 17.5 percent to $7.40 billion from $6.30 billion, as sales at stores open at least a year increased 11.5 percent.
In the first nine months, Walgreen earned $771.5 million, or 75 cents per share, up 15 percent from $668.7 million.
Results include a $5.5 million pretax gain this year for partial payments of the company’s share of a brand-name prescription drug antitrust settlement.
Last year’s numbers benefited from a $22.1 million pretax gain related to the same litigation.
Sales for the year to date rose 17 percent to $21.44 billion from $18.34 billion.
