Walgreen CEO predicts improvement

Facing the threat of a recession on the horizon and an unusually light flu season, Walgreen Chief Executive Officer Jeffery Rein nevertheless vowed a full recovery for the retail drug chain.

Rein told more than 2,000 shareholders gathered Wednesday afternoon at Chicago's Navy Pier the 3 percent fall in profits last summer and poor cold and cough sales during the holidays created "trying times" at Deerfield-based Walgreen Co.

However, Rein said he will not back away from his commitment to build 550 stores this year and he is not interested in buying a pharmacy benefit manager firm, as rival CVS Corp. bought Caremark RX Inc. in March.

"There are multiple paths to making sales," said Rein, adding Walgreen may be in the market for smaller independent pharmacies.

The packed shareholders meeting opened just as Walgreen's shares dipped below its 52-week low of $33.09. It ended the day down about 1 percent, or 45 cents, to $33.78.

"I'm quite confident we'll bounce back," Rein said, noting several pharmacy chains posted weak sales during the holiday season. "Right now we're caught in the down draft of retail."

Rein noted fiscal 2007 was the firm's 33 consecutive year of record sales, up 13.4 percent. Earnings rose 16.6 percent, the fastest pace in seven years.

The shareholder meeting came on the same day Walgreen announced it will offer shipping services at all its U.S. stores as part of a new agreement with delivery company DHL.

Walgreen already has kiosks to label, weigh and ship packages at test stores in Florida and Illinois.

It expects to install DHL centers in about 6,500 stores by the end of the year, with about 1,600 Walgreens offering DHL services around the clock.

The move will give DHL, a subsidiary of German mail and shipping company Deutsche Post AG, a hefty boost -- doubling the number of retail outlets where its services are provided.

"The service addresses an important need for our time-crunched customer base," said George Riedle, Walgreen's executive vice president of marketing.

In a press conference after the shareholder meeting, Rein said as the company grows it is looking for ways to expand its headquarters facilities in the Deerfield area.