Walgreens net earnings soar

Deerfield Park, Ill. – Walgreen Co. reported a healthy 68% surge in net earnings during the first quarter of fiscal 2014 to $695 million from $413 million in the same period a year earlier.

Net sales rose about 6%, to $18.3 billion from $17.3 billion, while same-store sales grew 5.4%.
A dramatic increase in equity earnings from Alliance Boots, with which Walgreens launched a strategic partnership in October 2012, helped drive the company’s net earnings growth. Walgreens president and CEO Greg Wasson said that generic drugs and promotions negatively affected the company’s margins during the quarter.

“Given the continued soft economy, we were generally satisfied with our top-line growth where we increased both traffic and sales for the quarter as well as our pharmacy market share,” Wasson said. “However, the year-over-year negative impact related to generics, including the significant shift in the generic wave from a peak a year ago to a trough this quarter as well as our strategic decision to make meaningful promotional investments in our daily living business, affected our margins for the quarter. That said, by continuing our strong focus on managing our expenses, we were able to continue growing gross profit dollars faster than costs during the quarter.”

As of Nov. 30, 2013, Walgreens operated 8,681 locations in all 50 states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. The company has 8,200 drug stores nationwide including Duane Reade stores, 142 more than a year ago.

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