Deerfield-based Walgreen Co. fell the most in more than two months after posting fiscal fourth-quarter revenue that trailed analysts' estimates as the lack of Express Scripts Inc. customers hurt pharmacy sales.
The shares slid 1.6 percent to $35.31 at 10:24 a.m. in New York and earlier dropped as much as 3.5 percent for the biggest intraday decline since June 20. Walgreen, the largest U.S. drugstore chain, gained 8.5 percent this year through Wednesday.
Sales in the three months ended Aug. 31 fell about 4.9 percent to $17.1 billion, Walgreen said Thursday in a statement. That trailed the $17.2 billion average of 17 analysts' estimates compiled by Bloomberg.
Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts customers expired. Walgreen and Express Scripts renewed that contract in July, and the drugstore chain will become part of the benefits provider's network again on Sept. 15.
Not being part of Express Scripts' network reduced comparable-store prescription sales by 10.7 percentage points in August, Walgreen said. Total August pharmacy sales slid 7.2 percent, the company said.
Adding to Walgreen's slump today is a decision by Tricare, the health plan for military personnel and their dependents, to continue excluding the company from its network of retail pharmacies, said John Heinbockel, an analyst at Guggenheim Securities LLC in New York. The retailer left the Tricare network Dec. 31 when its contract with Express Scripts ended.
"We had assumed that Walgreen would be in this plan and that it would recover 50 percent of the lost business," Heinbockel wrote today in a note. He rates Walgreen a buy.