Walgreen Co., the largest U.S. drugstore retailer, reported a decline in fiscal fourth-quarter earnings after the loss of customers to rivals hurt sales.
Net income in the quarter ended Aug. 31 fell 55 percent to $353 million, or 39 cents a share, from $792 million, or 87 cents, a year earlier, the Deerfield-based company said today in a statement. Sales dropped 5 percent to $17.1 billion.
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Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts Holding Co. customers expired in December. Walgreen and Express Scripts renewed that contract in July, making the drugstore chain part of the benefits provider's network again Sept. 15.
"We still believe that Walgreen will have difficulty winning back former Express Scripts customers," Meredith Adler, an analyst at Barclays Plc in New York, wrote in a note Sept. 24. She rates the shares equal weight, the equivalent of a hold recommendation.
Excluding some items, profit in the quarter totaled 63 cents. Analysts projected 56 cents, the average of estimates compiled by Bloomberg.
The shares rose 2.2 percent to $36.60 yesterday in New York. Walgreen had advanced 11 percent this year through yesterday.
(The company will hold a conference call for analysts at 8:30 a.m. New York time. Click WAG US EVT to listen.)