Walgreen 1st-quarter profit rises 20 percent on boost in prescription drug sales

Walgreen 1Q profit rises 20 percent on drug sales

NEW YORK — Concerned customers got more than 5 million flu shots at Walgreen Co. stores in the fall, helping the company boost its quarterly profit by 20 percent.

The company administered 5.4 million seasonal flu shots between Sept. 1 and Nov. 30, compared with 1.2 million in last year’s entire flu season, from October to February. The shots cost $24.99 at most Walgreen stores. Demand was strongest in September and October and then slowed last month, although sales could pick up over the winter.

Like other drugstores, Walgreen started giving the shots several weeks earlier than in 2008.

Two-thirds of the people who got flu shots had not filled a prescription at Walgreen in the last six months, the company said Monday.

Walgreen said prescription drug sales also improved, and its pharmacies are taking more market share. But it emphasized that consumers are cutting back on holiday shopping because of high unemployment, hurting sales of items other than drugs.

Walgreen added that it may get a boost as customers make a last-minute rush for Christmas gifts. However, compared with last year, the company said it will offer fewer post-holiday discounts because it is not carrying as many seasonal products.

The Deerfield, Ill., company earned $489 million, or 49 cents per share, in its fiscal first quarter, up from $408 million, or 41 cents per share, a year ago. Excluding 3 cents per share in restructuring costs, the company said it earned 52 cents per share. Revenue rose 9.5 percent to $16.36 billion from $14.95 billion.

Wall Street forecasts called for 48 cents per share in profit and just under $16.3 billion in revenue, according to a survey by Thomson Reuters.

Walgreen is planning to remodel and redecorate thousands of locations to improve sales, keep costs down, and make the stores more pleasant for customers. It is testing a new store layout at 400 sites in Texas, and plans to switch about 3,000 of its 7,000 stores to the format by fall 2010.

It delayed the planned switch by about three months so it can make changes to the decor of its stores. Walgreen is also selling beer and wine at around 1,600 stores.

The company opened or relocated 150 stores during the quarter and had 7,147 retail locations as of Nov. 30.

Walgreen shares slipped 3 cents to close at $36.61 Monday.

Associated Press Writer Damian Troise in New York contributed to this report.