Walgreen Declines as Profit Margin Falls Short of Expectations

Walgreen Co., the largest U.S. drugstore chain, dropped the most since October 2008 in New York trading after profit margins failed to improve as some analysts anticipated.

The shares fell $3.38, or 8.1 percent, to $38.59 at 9:52 a.m. in New York Stock Exchange composite trading, after earlier dropping as much as 8.4 percent. The Deerfield, Illinois-based company also said today that second-quarter net income rose to 80 cents a share, matching the average of estimates in a Bloomberg survey.

Gross margin, or the percentage of sales left after the cost of goods sold, was little changed at 28.8 percent, Walgreen said. Analysts at Barclays Capital and Citigroup expected gross margin would widen at the chain, which operates about 7,700 locations across the U.S. and filled one in five retail prescriptions last quarter.

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- Posted: 2011-03-22 09:34:20

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