Here's How Walgreen Beat Earnings Expectations

Dec.22.10 | About: Walgreens Boots (WBA)

Walgreens (WAG) crushed Wall Street’s earnings expectations on a large profit beat. As a result, shares of the drugstore are trading up over 6%.

Walgreens Earnings Cheat Sheet

Earnings: Increased 19% to a profit of $580 million ($0.62/share) versus $489 million ($0.49/share) YOY.

Revenue: Up 6% YOY to $17.3 billion.

Actual Versus Wall St. Expectations: WAG beat the street, as analysts were expecting EPS of $0.54/share on revenues of $17.3 billion.

Notable Stats:

  • Comparable-store sales increased 0.8%.
  • Gross profit margin increased 0.8 to 28.5%.
  • Non-pharmacy (i.e., front-end) comparable sales rose 0.4%.
  • Prescription sales (~66% of total sales) rose 5.3%. Prescription sales in comparable stores rose 0.9%.

Did You Hear That? President and CEO of Walgreen Company Greg Wasson said:

Our performance was driven by our continued focus on gross profit margins, cost control and the strategic slowing of our new store openings.

Competitors to Watch: CVS Caremark Corporation (NYSE:CVS), Rite Aid Corporation (NYSE:RAD), (NASDAQ:DSCM), Target Corporation (NYSE:TGT), and Wal-Mart Stores, Inc. (NYSE:WMT).

Commentary: Shares of WAG are testing 2-year highs. The stock is comfortably above the 50 and 200DMA.

Click to enlarge

(Click to enlarge)

Disclosure: No position