Walgreen Q2 profit rises, misses Street
Deerfield, Ill. Walgreen Co. reported Tuesday that quarterly earnings rose in the second quarter, helped by stronger prescription drug sales and healthier margins.
The drug store retailer recorded a 4.5% rise in profit for the quarter ended Feb. 28, to $669 million from $640 million in the year-ago period. Earnings fell short of Wall Street expectations. Second-quarter results included ongoing restructuring costs.
Sales rose 3.1% to $16.99 billion, just short of analysts’ estimates of $17.17 billion.
Same-store sales dipped 0.2%.
The company said a weak flu season hampered sales of cough, cold and flu-related products. However, margins improved in the quarter as the company stocked fewer seasonal goods, and was not forced to mark them down to the same extent as a year ago. And prescription revenue increased 3.2% as more customers filled 90-day prescriptions.
The company is in the midst of buying New York City drug store chain Duane Reade, as part of a deal announced in February. When completed, the deal will make Walgreen the leading drug store operator in the city.
Walgreen acquired or opened 41 stores during the quarter. At the end of February, it ran 7,180 stores in all 50 states, along with Puerto Rico; Guam; and Washington, D.C. The company also has 500 worksite health centers, home care facilities, and specialty and other pharmacies.
Target selects DemandTec for assortment optimization
SAN MATEO, Calif. Target has selected DemandTec’s nextGEN Assortment Optimization software service to further tailor and localize its assortments, DemandTec reported.
The Assortment Optimization software enables retailers to optimize assortments across multiple categories, taking into account shopper insights and preferences.
“Like pricing in recent years, assortment planning has permanently changed. Rank reports and basic analytics simply don’t provide major retailers with the right insights they need to optimize and localize assortments for different store clusters, store layouts, and customer segments,” said Dan Fishback, president and CEO of DemandTec. “Target selecting DemandTec’s Assortment Optimization is a testament to this change and we are honored to further expand our strategic relationship with such an innovative industry leader.”
Capturing the Twi-hards
Target is looking to take a bite out of the “Twilight” competition, by offering its selection of exclusive merchandise and promoting all things “New Moon” on its Web site.
The retailer, like Walmart, is offering its own “exclusive” DVD version of The Twilight Saga: New Moon along with clothing, toys and other items related to the popular film.
Target stopped at going the length Walmart has to garner Twilight fans. Walmart is featuring limited-time “Twilight Saga Shops” in its stores that, in addition to including the DVD and themed merchandise, showcases food and other items to complete a movie viewing experience.