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An Alibi to Sneeze At

Walgreen says it missed its estimates because of a slow flu season. Cramer isn't buying it.

Nope, I am not buying



flu-bug alibi. Not at all. Not one bit. I think that there is something structurally wrong with the drug store business and that structural problem is the Net.

In case you missed any of the excuses and explanations, Walgreen blamed its penny shortfall on the weak cold-and-flu season. To which I say: hogwash. First of all, in my neck of the woods, the flu season was just plain awful during these last three months.

Second, Walgreen has consistently exceeded estimates, flu or no flu, for years. A few weeks ago on a



chat someone asked me what to do with Walgreen and I said dump it because everybody loves these guys. I think their model and their profitability is coming under attack from the proliferation of all the vitamin and long-term drug Web sites. Those sites are well-capitalized and they can afford to wreak havoc with Walgreen's margins.

Why take a chance? There is nothing "safe" about the drug store business, as we saw from the decline in

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I think the fact that Walgreen is only down a buck and a half on a miss is an opportunity.

An opportunity to get out before it gets worse.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Yahoo!. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at