Walgreen Co. (NYSE: WAG): Q3 Earnings Preview 2011

Walgreen Co. (NYSE: WAG), the largest US drugstore chain, is scheduled to release its fiscal third-quarter earnings before the opening bell on Tuesday, June 21, 2011. Analysts, on average, expect the company to report earnings of 62 cents per share on revenue of $18.33 billion. In the year ago quarter, the company reported earnings of 51 cents per share on revenue of $17.20 billion.

Walgreens is the nation's largest drugstore chain with fiscal 2010 sales of $67 billion. As of May 31, Walgreens operated 8,171 locations in all 50 states, the District of Columbia, Puerto Rico and Guam. That includes 7,714 drugstores, 192 more than a year ago, including 23 stores acquired over the last 12 months. The company also operates worksite health centers, home care facilities and specialty and mail service pharmacies. Its Take Care Health Systems subsidiary manages more than 700 in-store convenient care clinics and worksite health and wellness centers.

In the preceding fiscal second-quarter, the Deerfield, Illinois based company's net income was $739 million, or 80 cents per share, compared to $669 million, or 68cents per share, in the prior-year quarter. Revenue grew  $18.50 billion from last year's $17 billion. Analysts, on average, expected the company to report earnings of $0.80 per share on revenue of $18.38 billion. 

At its last earnings call in March, Walgreens said that it expects organic store growth of 2.5 - 3 percent in fiscal 2011.

Early in May, the company said that total sales for the third quarter of fiscal 2011 were $18.38 billion, up 6.8 percent from $17.20 billion in the third quarter of fiscal 2010. Comparable store sales for the third quarter of fiscal 2011 increased 4.1 percent, while front-end comparable store sales for the quarter increased 3.9 percent. Prescriptions filled at comparable stores increased 4.5 percent in the third quarter and comparable pharmacy sales increased 4.2 percent.

The company is steadily improving its cost structure. The company has been able to cut back on profit-sapping promotions as it has improved its merchandise assortment and kept inventory under control. The company also has been slowing down the pace of new store openings and converting thousands of stores to a new, streamlined format that reduces some of its pharmacists' administrative workload so they can spend more time talking with customers.It has also added various products to its offering including beer and wine.  Recenrtly, Walgreen completed the divestment of its pharmacy benefit management business to Catalyst Health Solutions for $525 million in cash. Walgreen also completed the purchase of Drugstore.com Inc. during the quarter. The move is intended to bolster its online health and beauty business.

Full Disclosure: None.

Walgreen Co. (NYSE: WAG): Q2 Earnings Preview

Walgreen Co. (NYSE: WAG), the largest US drugstore chain, is scheduled to release its fiscal second-quarter earnings before the opening bell on Tuesday, March 22, 2011. Analysts, on average, expect the company to report earnings of $0.80 per share on revenue of $18.38 billion. In the year ago quarter, the company reported earnings of $0.68 per share on revenue of $16.99 billion.

Walgreen Co., together with its subsidiaries, engages in the operation of a chain of drugstores in the United States. The company provides its customers with multichannel access to consumer goods and services, and pharmacy, health and wellness services in communities across America. As of February 28, Walgreens operated 8,161 locations in all 50 states, the District of Columbia, Puerto Rico and Guam. That includes 7,689 drugstores, 509 more than a year ago, including 288 stores acquired over the last 12 months. 

In the preceding fiscal first-quarter, the Deerfield, Illinois based company's net income was $580 million or $0.62 per share for the first quarter, compared with a profit of $489 million or $0.49 per share in the prior-year quarter. Revenue grew rose 6% to a record $17.34 billion from $16.36 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $0.54 per share on revenue of $17.30 billion. 

Early this month, the company said that total sales for the second quarter of fiscal 2011 were $18.46 billion, up 8.7 percent from $16.99 billion in the second quarter of fiscal 2010. Comparable store sales for the second quarter of fiscal 2011 increased 4.0 percent, while front-end comparable store sales for the quarter also increased 4.0 percent. Prescriptions filled at comparable stores increased 4.5 percent in the second quarter. Prescription sales account for nearly two-thirds of sales The 2010-11 flu season has been a bit milder than normal. Walgreen said it has given 6.4 million flu vaccinations since mid-August. The company said last year that it was aiming to sell 15 million shots over the winter months, and while the flu season is not over, the company is far short of that goal.Walgreen Chief Financial Officer Wade Miquelon said flu shot sales were strong last year because the 2009 swine flu epidemic was still fresh in the minds of consumers. That created greater demand for the seasonal vaccine, which was given separately from the swine flu vaccine.

The company is steadily improving its cost structure. The company has been able to cut back on profit-sapping promotions as it has improved its merchandise assortment and kept inventory under control. The company also has been slowing down the pace of new store openings and converting thousands of stores to a new, streamlined format that reduces some of its pharmacists' administrative workload so they can spend more time talking with customers.It has also added various products to its offering including beer and wine.

Full Disclosure: None.

Rite Aid Corp. (NYSE: RAD): Third Quarter Earnings Preview 2010

Rite Aid Corp. (NYSE: RAD), the third largest US retail drugstore chain, is scheduled to release financial results for the third quarter ended November 28, 2009 on Thursday, December 17, 2009. Analysts, on average, expect the company to report a loss of 18 cents on revenue of $6.38 billion. In the year ago quarter, the company reported loss of 30 cents per share on revenue of $6.47 billion.

Rite Aid Corporation, through its subsidiaries, operates retail drugstores. Its drugstores primarily provide pharmacy services. The company sells prescription drugs and front-end products. As of November 28, 2009, the company operated 4801 stores, compared with 4,914 a year ago. The drug retailer has lost money in each quarter since its June 2007 acquisition of Brooks & Eckerd. Total losses have amounted to more than $4 billion amid massive write-downs.

Late in September, the Camp Hill, Pennsylvania-based company reported second-quarter results that recorded a ninth straight quarter in which it posted a loss. Net loss attributable to common stockholders was $120.38 million or $0.14 per share, compared to a loss of $227.39 million or $0.27 per share in the same quarter of last year. Revenue for the quarter were $6.32 billion, compared to $6.50 billion in the prior year quarter. Analysts, on average, expected the company to report a loss of $0.16 per share on revenue of $6.40 billion for the quarter.

Same store sales for the quarter declined 1.1% over the prior-year 13-week period, consisting of a 4.9% decrease in the front end and a 0.8% increase in pharmacy. Excluding the acquired Brooks Eckerd stores, same store sales for the 13-week second quarter decreased 0.6% over the prior-year period with front-end decreasing 4.9% and pharmacy growing 2.0%. Gross margin was 26.7% for the thirteen week period ended August 29, 2009 compared to 27.4% for the thirteen week period ended August 30, 2008.

The struggling drugstore chain operator said in September that it expects negative trends and a tough economy to continue throughout the second half of the year. In September, the company lowered its earnings and revenue guidance for fiscal 2010. Net loss for fiscal 2010 is now expected to be between $390 million and $615 million. Earlier, the company expected net loss for the year in a range of $265 million to $490 million. For fiscal 2010, the company now expect loss per share to be in the range of $0.48 to $0.74. Earlier, the company expected loss per share of $0.33-$0.59 per share. For fiscal 2010, Total sales are expected to be between $25.7 billion and $26.2 billion with same store sales ranging from a decrease of 1.0% to an increase of 1.0% over fiscal 2009. Earlier, the company had projected fiscal 2010 sales of between $26.30 billion and $26.70 billion, with same store sales improving 0.50% to 2.50% over fiscal 2009.

Rite Aid expects its front-end sales to continue to be pressured during the remainder of fiscal 2010 as cautious consumers continue to spend less on non-essential items and be more aggressive about searching for promotional sales. It expects pharmacy gross margin to be lower than the prior year for the remainder of fiscal 2010 due to continued reimbursement rate pressures, fewer new generics and the impact of the recently implemented AWP cost adjustments on Medicaid business.

The company has reported drop in same-store sales during each month of the quarter. Rite Aid reported a 0.8% decline in comparable store sales for the five-week period ended November 28, 2009, compared to the same period last year. Total drugstore sales for the quarter declined 1.8% to $6.329 billion from $6.444 billion in the year-ago quarter. Same store sales for the four weeks ended October 24, 2009, decreased 0.5% while September same-store sales fell 0.3%.

The company has been closing stores and cutting debt in response to poor corporate performance, but these moves haven't proved fruitful so far. Rite Aid's trouble has been compounded by intense competition from its larger rivals, Walgreen (NYSE: WAG) and CVS (NYSE: CVS), as they continue to add stores to their chains. Rite Aid's name has often turned up in various bankruptcy risk list. The turnaround still remains elusive and the company has been struggling to integrate Brooks & Eckerd.

In terms of stock performance, Rite Aid shares are down 15% since the beginning of third quarter.

Full Disclosure: None