FINANCE

Walgreens Q4 profit falls 55%, but adjusted results top forecasts

BY Marianne Wilson

Deerfield Beach, Fla. — Walgreens’ fiscal fourth quarter net income fell 55% compared with a year ago when the drugstore operator recorded a big business sale gain. However, its adjusted earnings still beat analysts’ expectations.

Walgreen earned $353 million for the quarter ended Aug. 31, compared with $792 million a year ago. On an adjusted basis, Walgreen earned $553 million versus $599 million a year earlier. Adjusted earnings excluded acquisition-related costs and costs related to inventory.

Revenue fell 5% to $17.1 billion, from $18 billion a year ago. The chain was impacted by a split with pharmacy benefits manager Express Scripts Holding Co. that shifted customers away from its stores. The companies have since agreed to a new contract, but it didn’t start until Sept. 15.

“This was a challenging, but very important year for Walgreens, and we finished with a tough quarter. While we controlled costs and generated strong cash flow in the fourth quarter, our performance also reflected a strategic shift in promotional spending, a continued economically challenged consumer, and the impact from Express Scripts,” said Walgreens president and CEO Greg Wasson. “Entering the new fiscal year, we believe we are positioned for growth as we benefit from the launch of our Balance Rewards loyalty program, our reentry into the Express Scripts pharmacy provider network and our execution of the Alliance Boots strategic partnership.”

For the full fiscal year, Walgreen earned $2.13 billion, or $2.42 per share, on $71.63 billion in revenue.

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REAL ESTATE

Report: Starbucks to expand across Scandinavia; to open in India by end of October

BY Staff Writer

New York — Starbucks Coffee Co. will open stores across the Scandinavian region in a partnership with Umoe Restaurant Group AS, a leading chain of service establishments in Scandinavia.

The first locations are expected to open in 2013 in Sweden and Norway.

Michelle Gass, president, Starbucks Europe, Middle East and Africa commented: “We are proud to increase our presence in Scandinavia as part of our growth strategy in Europe, Middle East and Africa, and further develop stores where our customers want and expect us to be

In other news, the chain will open its first shop in India, in the Horniman Circle area of Mumbai by the end of October 2012. The store will be operated by Tata Starbucks Limited, the 50/50 joint venture between Starbucks Coffee Co. and Tata Global Beverages Limited.

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Mar-08-2013 04:31 pm

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Mar-08-2013 04:31 pm

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REAL ESTATE

Macy’s to open 450 in-store Finish Line shops

BY Marianne Wilson

Cincinnati — Macy’s Inc. announced on Friday that Finish Line Inc. would be the department store retailer’s exclusive athletic footwear partner, opening in-store shops in more than 450 Macy’s stores nationwide. The merchandise will also be available online at macys.com.

Under the agreement, Finish Line will be Macy’s exclusive partner for men’s, women’s and kids athletic footwear and Macy’s will be the exclusive host for Finish Line-branded in-store shops.

“We believe the enhanced footwear assortment they will bring to our customers at every full-line Macy’s store nationwide, as well as on macys.com, complements our rapidly developing offering of activewear merchandise,” said Jeff Gennette, Macy’s chief merchandising officer. “With Finish Line on our team for athletic shoes, Macy’s will be a comprehensive and compelling destination for footwear across all categories – from dress to casual to comfort to athletic – for men, women, and kids.”

The rollout of the shops, which will be operated by Finish Line as leased departments, will start in spring 2013 with completion expected by fall 2014. (For the remaining approximately 225 Macy’s stores that carry footwear, Finish Line will manage the athletic footwear assortment and inventory beginning in spring 2013, without the staffing or branding provided in the leased departments.)

Finish Line will recognize sales and corresponding profits, less the licensing fee paid to Macy’s. Longer term, this agreement is expected to result in additional sales to Finish Line of $250 million to $350 million annually.

The agreement comes as Macy’s rival J.C. Penney has launched the first wave of its branded in-store shops, starting with Levi’s, Liz Claiborne and Izod. J.C. Penney eventually plans to transform its stores into a collection of some 100 branded shops.

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