Breaking News Bar
posted: 9/6/2012 10:31 AM

Walgreen shares slide after sales trail estimates

hello
Success - Article sent! close
  • 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 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.
    GEORGE LECLAIRE | Staff Photographer

 
Bloomberg News

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.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

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.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here