Melissa Davis
Walgreen (WAG Quote - Cramer on WAG - Stock Picks) has seen healthier days.
The giant drugstore chain posted another record-breaking quarter, as it cut prices on its merchandise and aggressively managed its expenses, but the company got an extra boost : Fourth-quarter profit jumped nearly 12% to $443 million, or 45 cents a share, but included a positive vacation accrual adjustment of $79 million. Analysts were expecting Walgreen to generate a 45-cent profit without that extra help. Walgreen fell a bit short of top-line projections as well. Thanks to growth in both its pharmacy and its front-end businesses, the company saw revenue climb 8.8% to approach $14.6 billion. Still, analysts predicted that the company would pass that mark with sales of $14.67 billion instead. Walgreen's stock fell $1.73 to a new 52-week low of $31 on the news. Given the tough industry environment, Walgreen felt that it performed quite well. The company saw same-store sales rise by 2.6% during the quarter, with same-store sales of front-end merchandise - which sometimes carries hefty margins -- climbing an even stronger 3.7%. Meanwhile, same-store sales of prescriptions rose 2.8% despite a slide in prescription volumes for the industry overall. Walgreen's total prescriptions, including those sold in its new stores, jumped by 7.9% in the latest period. In contrast, total prescriptions sold by others across the industry fell by 1.9% during that same timeframe. "Tough times are forcing people to make tough choices -- delaying doctor visits and prescription use," Walgreen CEO Jeffrey Rein said. "Even with these challenges, our pharmacies are consistently performing ahead of the industry."
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