Walgreen profit up 2 percent

23/06/2008 - 14:07

CHICAGO (Reuters) - Walgreen Co on Monday posted a 2 percent increase in quarterly profit as sales were muted by a weak U.S. economy and slowing growth in prescription drug sales.

The company, one of the largest U.S. drugstore chain operators, said earnings rose to $572 million, or 58 cents a share, in the third quarter that ended May 31, from $561 million, or 56 cents a share, a year earlier.

Analysts on average had forecast 59 cents a share, according to Reuters Estimates.

Sales rose 9.6 percent to $15.01 billion.

Sales at stores open at least a year rose 3.4 percent, prescription same-store sales were up 2.7 percent and sales of nonprescription items rose 4.6 percent in a same-store basis.

Walgreen has seen the pace of prescription drug sales slow as the allergy medicine Zyrtec became available over the counter.

Selling, general and administrative spending as a percent of sales was about flat, as the company cut advertising spending and slowed the pace of salary expense increases in stores.

Walgreen shares were about $35 in premarket trading on Monday, compared with Friday's New York Stock Exchange close of $35.07. The stock is down 8 percent this year, compared with a 4 percent rise by shares of rival CVS Caremark Corp .

(Reporting by Brad Dorfman; Editing by Maureen Bavdek)

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