Shares of Walgreen Co. picked up more than 11 percent after the drugstore chain posted a 7.8 percent increase in fourth-quarter earnings, easily topping Wall Street estimates.
Net income in the three months rose to $470 million, or 49 cents a share, 5 cents above analysts’ consensus estimates. Year-ago profits were $436 million, or 44 cents.
Costs associated with Walgreens’ acquisition of metro-New York drugstore chain Duane Reade subtracted 4 cents from EPS and restructuring costs accounted for an additional 1 cent a share.
During the three months ended Aug. 31, sales increased 7.4 percent to $16.87 billion from $15.7 billion in the prior-year period.
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Same-store sales were up 1.5 percent, with comparable front-end sales up 1.2 percent. Meanwhile, prescription sales accounted for 65.9 percent of quarterly revenues and comparable-store prescription sales were up 1.6 percent. The firm noted that comp-store sales figures exclude Duane Reade stores.
“The double-digit increase in fourth-quarter earnings per share was driven by strong operating performance across our…store network and expense control company-wide,” stated Greg Wasson, president and chief executive officer of the more than 8,000-store chain. “We were able to once again generate increased cash flow from operations for the quarter.
“We remain confident in our ability to drive earnings growth, increase our return on invested capital and generate strong cash flow,” he added.
In addition to the acquisition of 258 Duane Reade stores, Walgreens said it opened 291 new drugstores during the fiscal year.
During the fourth quarter, Walgreens returned 17.5 cents a share in dividends. Also, the company noted, it completed a $2 billion share repurchase program this month, 11 months after it was announced.
For the full year, net earnings were up 4.2 percent to $2.09 billion, or $2.12 a share, from $2.01 billion, or $2.02, on total revenues that reached $67.42 billion, up 6.4 percent from $63.34 billion in the prior year.
Shares of Walgreens closed up $3.46, or 11.4 percent, to close at $33.81.