Joe Raedle
Walgreen Co , the largest U.S. drugstore chain, posted a sharply higher quarterly profit Tuesday, helped by rising sales of general merchandise and prescriptions.
Walgreen said more people visited its stores and spent more per visit. The company is working on expanding its health and wellness services, such as clinics it operates in its stores and at work sites, as it tries to differentiate itself from archrival CVS Caremark Corp.
CVS operates a large pharmacy benefits management business, while Walgreen sold its own PBM unit in June.
Shares of Walgreen, which runs more than 7,7O0 drugstores, were up 2 per cent at $36.75 in premarket trading.
The company said it had earned $792 million, or 87 cents per share, in the fourth quarter which ended Aug. 31, compared with $470 million, or 49 cents per share, a year earlier.
Excluding the benefit from the PBM sale, the profit was 57 cents per share.
Meanwhile, Walgreen is publicly fighting with large PBM Express Scripts Inc. The drugstore chain plans to stop filling prescriptions for people covered by Express Scripts at the end of the year after failing to agree on new contract terms, walking away from what could have been more than $5 billion in annual sales.
The company said there has been "no substantive progress" in the contract renewal negotiations with Express Scripts.
Sales rose 6.5 per cent to $18-billion, slightly above the $17.92 billion Wall Street analysts were expecting, according to Thomson Reuters I/B/E/S.
Same-store prescriptions rose 3.4 per cent, which claimed to have a 20 per cent market share for fiscal 2011, and sales at stores open at least a year rose 4.4 per cent in the quarter. The number of visitors to drugstores open at least a year rose 1.6 per cent and customers spent 3 per cent more per visit.