Walgreen Co., which is the largest U. S. drugstore chain, informed about a lower-than-anticipated quarterly profit as sales of nonprescription items saw low demand, sending its shares down by 6.1%.
Sales at stores open at least a year, which did not include its getting hold of Duane Reade, which increased by 0.7% in general, but inched up by a mere 0.1% in common, or front-end, merchandise such as milk, aspirin, toothpaste and cosmetics, because of weak discretionary spending and lower demand for flu-related products.
It is the front-end discretionary sales that actually bring in the income, said Tim Ghriskey, Chief Investment Officer of Solaris Asset Management, which does not at present possess Walgreen shares. This is a Company that has not been executing in the recent times.
Sales of prescriptions, which were responsible for 65.4% of the total, increased by 5.7%, and their same-store sales saw a rise of 1%.
Walgreen ended a high-stakes clash with CVS Caremark Corp. in the previous week over repayments for drug prescriptions that analysts said had strained its limits. Company officials refused to talk about particulars of the accord on Tuesday.
Net income saw a fall of 11% to $463 million, or 47 cents a share, in its economic third quarter that ended on May 31, from $522 million, or 53 cents a share, a year prior.