Drugstore stocks were sliding Thursday after big chains CVS Caremark ( CVS), Walgreen ( WAG) and Rite Aid ( RAD) posted December sales that were viewed as sickly.
Shares of CVS were slipping $2.36, or 6%, to $36.99, while Walgreen was down $2.22, or 6%, to $35.12. Rite Aid was down 18 cents, or 6.7%, to $2.51. CVS posted a 1.8% rise in same-store sales, or sales at stores open at least a year, for its retail division. The company said the results were lighter than expected because of bad weather in the early part of the month, a slowly developing flu season and tough economic conditions.
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Front-end same-store sales increased 0.6%. Pharmacy same-store sales rose 2.4%, with recent generic-drug introductions cutting the figures by 470 basis points, CVS said. Nonetheless, CVS said it expects 2007 earnings of $1.91 to $1.92 a share, at the high end of its prior guidance of $1.89 to $1.92. For the fourth quarter, the company projects earnings of 54 cents to 55 cents a share. Analysts polled by Thomson Financial predict earnings of 55 cents a share for the quarter and $1.92 a share for the year. The company, which also operates the Caremark pharmacy-benefit manager business, attributed the rosier profit outlook to favorable operating expenses and improved margins. Meanwhile, CVS' chief rival, Walgreen, reported a 2.6% rise in December same-store sales. That's the smallest monthly increase since at least 1990, Reuters reported.