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Earnings Calls: 
Walgreen First Quarter Earnings Call
Author: Rozalina Destanova
123jump.com
Last Update: 6:40 AM EST December 27 2007


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The U.S. drugstore operator’s revenue increased 10.4% to $14.03 billion, failing to meet analysts’ expectations of $14.11 billion. Same-store sales rose 5.4%, while front-end same-drugstore sales rose 4.6%. Prescription sales, which accounted for 66.1% of sales, climbed 11.1%. Prescription sales in comparable stores rose 5.9%, while the number of prescriptions filled in comparable stores increased 3.7%. The company plans to open 550 new stores in 2007, with a net increase of more than 475.


Investors Question and Answers

 
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Sequential Earnings Growth | Quarterly Earnings by Year | Quarterly Earnings Growth by Year

Source: Company filings    Q1:November  Q2:February  Q3:May  Q4:August
 
William Rudolphsen: We have not been buying back stock. At this point we are investing in the company. We do consider it, but at this point we do not have excess cash to return to shareholders. We do have about $1.2 billion inCT at this point in time.

Derek Leckow (Barrington Research): On the Take Care clinics you are seeing a positive lift in some mature markets. What happens to store profitability when you initially open one of these clinics?

Jeff Rein: We have not seen anything. It is de minimus when you talk about something like that. You are getting people into the Walgreen’s system. We have not measured that in terms of what you are asking. What we want to do is get people into the Walgreen’s system; approximately 20% coming in are new to Walgreen’s. It helps them get into our system and get familiar with our stores. They get their pharmacy needs at our stores; they get exposed to photo, cosmetics and so on. They are being serviced properly in terms of healthcare needs. I would not quantify it at this point.

Derek Leckow (Barrington Research): Longer term, is it true that you are expecting to see some incremental lift in some of these other categories when you open up these clinics?

Jeff Rein: Yes, that is true. When we did the pro forma for them, we did not add anything in but you do see cross shopping. If people do not need a prescription, sometimes they need an OTC so they will buy it there. There is the opportunity to sell other products; that is true.
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