Walgreen Earnings Climb on Pharmacy Sales

Monday, March 28th 2005, 9:33 am

By: News On 6

CHICAGO (AP) _ Walgreen Co. on Monday said its second quarter earnings grew 13.7 percent buoyed by continued strength in pharmacy sales and a solid holiday shopping season, but the results fell short of Wall Street's expectations.

Profit for the December-through-February period were $490.9 million, or 48 cents a share, up from $431.6 million, or 42 cents a share, a year earlier, the company said.

Walgreen shares fell $1.19, or 2.6 percent, to $45.04 in early trading Monday on the New York Stock Exchange.

Excluding a gain of $4.7 million from litigation settlements, Walgreen's earnings were $487.9 million, or 47 cents a share _ a penny below the average estimate of analysts surveyed by Thomson First Call.

``Our results benefited from continued solid execution at our stores, especially during the important holiday selling season,'' Walgreen Chairman and CEO Dave Bernauer said in a statement.

Pharmacy sales grew 13.8 percent for the quarter, totaling more than 61 percent of the drugstore chain's overall sales. Prescription sales at comparable stores, or those open at least a year, grew 10 percent.

Overall sales increased 12.3 percent to $11 billion, which was in line with analysts' estimates. Revenue from comparable stores grew 7.7 percent.

Walgreen saw its costs rise in the second quarter from continued investment to convert its photo labs to digital processing, the company said.

The Deerfield-based company opened 178 stores during the first six months of fiscal 2005, 38 more than the same period a year earlier. It expects to have opened 450 stores for the year, for a gain of 365 stores after closings.