Chicago: Walgreen Co., the largest US drugstore chain, reported a quarterly profit that topped expectations, as it began to benefit from a make-over that includes sprucing up stores and cutting jobs, sending its shares higher.
Analysts have applauded Walgreen’s efforts, such as cutting back on store openings, revamping stores with lower shelves and fewer items and planning a loyalty program. But they say it will take time for them to pay off.
Profit fell to $436 million, or 44 cents per share, in the fiscal fourth quarter ended 31 August, from $443 million, or 45 cents per share, a year earlier. The latest quarter’s EPS included 3 cents in costs and 7 cents in savings from Walgreen’s transformation plans.
Analysts, on average, had expected a profit of 39 cents per share, according to Reuters Estimates.
Sales rose 7.6% to $15.7 billion, while sales at stores open at least a year rose 2.4%.
Walgreen has continued to see weak demand for general merchandise in the challenging economy. Last week, rival Rite Aid said consumers shopping at its drugstores were focused on buying items on sale.
Shares of Walgreen jumped 5.7% to $36.15 in premarket trading.