Walgreen Up As Profit Tops Views, Margins Jump Again |
| Wall Street Journal - Dec 22, 2010 |
Walgreen Co. (WAG) investors cheered its fiscal-first-quarter results, despite a write-down of its overly ambitious flu-shot inventory, as gross margins continued to swell.
Chief Executive Greg Wasson said the drugstore chain is "very pleased" with the results, but "far from complacent." Walgreen benefited from its strategy to control costs as it puts the days of rapid new-store growth behind it.
Wasson, on a conference call to discuss the results, said the economic and political environment remains "difficult," with "a lot of uncertainty." Nonetheless, its per-share earnings handily beat analysts' expectations, even with a charge to write down some of its massive inventory of flu vaccines.
Through the end of the quarter, Walgreen administered 5.6 million flu vaccines, and it will soon top 6 million, making it the largest flu-shot provider behind the U.S. government. Even though that's even better than last year's heavy volume, when the nation was gripped with fear of the H1N1 virus, it's too low to suggest Walgreen will meet its target for 15 million vaccines delivered this season.
Kermit Crawford, Walgreen's president of pharmacy services, on the call conceded the company was too aggressive with its flu-shot projections, but said the company intends to stay that way. Walgreen wants to be the leading flu-shot provider, he said, and it doesn't want to repeat what happened in 2009, when it "disappointed customers" by running out of its vaccine inventory.
Read Full Article from Wall Street Journal
- Posted: 2010-12-22 09:08:28
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