Walgreens Q1 profit falls

New York -- Walgreens fiscal first-quarter earnings dropped nearly 26% as costs tied to a couple big deals and Hurricane Sandy helped put a bigger-than-expected dent in the chain's performance.

Walgreens earned $413 in the quarter million, compared with net income of $554 million in the year-ago period. Sales fell 4.6% to $17.32 billion, with same-store sales down 8%.

“During a quarter that included a number of non-operational items, as well as the ongoing Express Scripts impact, we saw the underlying performance of our business strengthen with improved gross profit margins and an upswing in comparable prescriptions filled in the quarter,” said Walgreens president and CEO Greg Wasson. “We also were pleased with the business performance of our strategic partner, Alliance Boots, and are on track to meet our first-year synergy targets with them. As I have said before, Walgreens and Alliance Boots both perform well in historically tough economic climates, and together we now are better positioned for growth.”

Walgreens also announced that it is reporting results from its investment in Alliance Boots on a one-quarter lag rather than a one-month lag period, as previously disclosed. This is intended to align the audit requirements for the investment and more efficiently address regulatory and audit considerations.

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