Deerfield, Ill. Walgreen Co. posted a lower-than-expected quarterly profit on Monday of $408 million, down 10.4% from a year ago.
Sales for the quarter, ended Nov. 3, increased 6.6% to $14.9 billion. Same-store sales increased 1.7% for the quarter.
“We continue to post solid sales results and achieve strong cost control in this difficult retail environment,” said Gregory D. Wasson, president and COO, Walgreen Co. “Customer traffic strengthened through the quarter and we’re making substantial progress on our growth strategies.”
Walgreen said it would reduce its store openings to a rate of 4% to 4.5% in 2010 and 2.5% to 3% in 2011. In July it set plans to slow store openings to 5% by 2011. Slowing store openings should save $500 million beyond the $500 million capital-expenditure reductions announced in July, Walgreen said.
“Slowing of organic store growth is a prudent step in the context of current economic condition,” Wasson said. “Furthermore, by freeing up human and financial capital, we are better positioned to drive greater value creation by enhancing our community-based store network.”
These enhancements include refreshing and remodeling existing stores, creating more efficient assortment within stores, and continuing its expansion of retail and worksite clinics.