Walgreen Misses Forecasts

NEW YORK ( TheStreet) -- Walgreen ( WAG) barely missed second-quarter profit expectations as same-store sales turned negative.

During the quarter the drugstore earned $669 million, or 68 cents a share, compared with $640 million, or 65 cents a share, in the year prior.

Excluding 2 cents in restructuring charges, Walgreen earned 70 cents a share, missing Wall Street's expectations by a penny.

Overall sales rose 3% to $16.99 billion, but same-store sales slipped 0.2%. Comparable sales were hurt by a milder winter flu season and a consumer cut back in discretionary purchases. Front-end sales, which include items such as haircare products and magazines, dropped 1.6%.

"As much as the early flu season helped our first-quarter results, it hurt our second-quarter results," President and CEO Greg Wasson said in a statement. "However, the company's decision to buy less seasonal inventory helped strengthen margins."
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Walgreen cited data from the Centers for Disease Control and Prevention, which showed that the percentage of physician visits by patients with flu symptoms fell to 1.8% in late February from 7.7% in late October.

Walgreen shares are rising 0.9% to $35.65 in morning trading.

The company is currently in the process of purchasing New York City drug-store chain Duane Reade. Once complete, the deal will make Walgreen the biggest drug-store operator in the city.

--Reported by Jeanine Poggi in New York.

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