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Walgreen 3Q profit up 27%
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June 28, 1999: 3:14 p.m. ET
Drug retailer also announces expanded online prescription sales
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NEW YORK (CNNfn) - Walgreen Co. said Monday a strong increase in prescription sales bolstered its fiscal third-quarter earnings by 27 percent, giving the nation's largest drugstore chain its best quarterly percentage profit gain ever.
Walgreen also announced it will launch a "full-service" Internet pharmacy in September, expanding beyond its online prescription refill service by allowing new prescription orders over the Net.
For the quarter ended May 31, Walgreen earned $159 million, or 16 cents per diluted share. That's up from $126 million, or 13 cents per share, in the year-earlier period, and one cent above the consensus of analysts surveyed by First Call.
Sales at Deerfield, Ill.-based Walgreen (WAG) rose 17.6 percent to a record $4.6 billion for the third quarter. Same-store sales, or sales at stores open at least a year, climbed 12.3 percent in the period.
Prescription sales, which accounted for 54 percent of sales in the quarter, rose 24 percent overall and 20.2 percent on a same-store basis.
"We're seeing especially impressive market share gains in our pharmacy, vitamin and photo-finishing businesses," CEO L. Daniel Jorndt said.
Walgreen said its current online prescription refill service gets 1,400 orders per day.
And in a move to expand beyond those numbers, the company plans to launch its full-service Internet pharmacy in September, allowing patients to submit new prescription orders for either mail delivery or pickup at any Walgreen store.
"Customers will have access to Walgreens any way they wish: in our stores, at the drive-through pharmacy window; over the phone or via the Internet; and at any time of day or night," said Walgreen President David Bernauer.
The move by Walgreen comes as the competition heats up to sell drugs over the Internet.
Earlier this month, No. 3 drugstore chain Rite Aid Corp. and vitamin retailer General Nutrition Centers Inc. said they will invest $10 million in drugstore.com Inc. in a deal that will boost the online pharmacy's prescription drug services. Earlier this year, Amazon.com acquired a 46 percent stake in Drugstore.com, an online pharmacy. And No 2 drugstore CVS recently announced it was buying Soma.com, an online pharmacy, for $30 million.
Walgreen on Monday took a shot at its competitors, which went online through acquisition as opposed to internal expansion.
"Just as we prefer building our own new stores over acquisitions, we're building our pharmacy Internet site organically, rather than simply acquiring or partnering with an existing one," Bernauer said.
Walgreen shares rose 1-1/ 8, or nearly 4 percent, to 28-11/16, in afternoon trading Monday.
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