SUPPLY CHAIN

Walgreens to Reduce Chain Growth

BY CSA STAFF

Deerfield, Ill. Walgreen Co. announced late Thursday that it would reduce its expansion plans beginning in fiscal 2009. The chain cited a need to provide more flexibility to invest in core strategies and improve shareholder value as reasons behind the slowdown.

Walgreens said it intends to reduce expansion from a nearly 9% increase in net new organic stores in the current fiscal 2008 (which ends Aug. 31) to a goal of about 6% in fiscal 2010 and approximately 5% annual increases beginning in fiscal 2011.

Previously, the company had planned a long-term store growth rate of 8%. New-store openings that are already in the pipeline are expected to result in approximately 8% organic store growth in fiscal 2009.

According to the company, it will open more than 500 net new organic stores (after relocations and closings) in the current fiscal year.

“This move allows us to improve both return on invested capital and overall shareholder value,” said Walgreens chairman and CEO Jeffrey A. Rein. “At the same time, it gives us the flexibility to invest in our core strategies.”

By moderating its organic store growth, Walgreens expects to reduce capital expenditures by about $500 million over the next three fiscal years compared to the company’s previously announced plans.

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Walgreens to reduce drug store growth

BY CSA STAFF

DEERFIELD, Ill. Walgreens reported that it plans to reduce its organic drug store growth from about a 9% increase for the current fiscal 2008 year to about 6% in fiscal 2010 and to about 5% annual increases beginning in fiscal 2011.

Previously, the company had planned a long-term store growth rate of 8 %. New store openings that are already in the pipeline are expected to result in approximately 8% organic store growth in fiscal 2009.

According to Walgreens, its planned future expansion rates are the equivalent of opening about 495 net new organic stores in fiscal 2009, 425 in fiscal 2010 and 365 in fiscal 2011. These new growth targets resulted from the companys regular review of its growth and capital expenditure plans.

This move allows us to improve both return on invested capital and overall shareholder value, said Walgreens chairman and ceo Jeffrey Rein. At the same time, it gives us the flexibility to invest in our core strategies. 

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Tuesday Morning 4Q sales drop 10.4%

BY CSA STAFF

DALLAS Tuesday Morning reported net sales for the fourth quarter ended June 30 were $196.5 million compared to $219.4 million for the quarter ended June 30, 2007, a decrease of 10.4%.

Comparable-store sales for the quarter ended June 30 decreased by 12.7% comprised of an 11% decrease in traffic and a 1.8% decrease in average ticket.

Based on the fourth quarter sales results, the company currently expects diluted earnings per share for the fourth quarter to be in the range of (5 cents) to (8 cents) compared to 5 cents for the same period last year.

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