Market Perform - Price 29.72 on June 23
by Barrington Research

Walgreen remains engaged in a significant restructuring initiative designed to put the company back on a double-digit long-term EPS growth track beginning with fiscal 2011. The company is accelerating some elements of its plan, leading to a greater negative impact on earnings in the short term. The company reported Q309 earnings that were below expectations and below the prior year, as higher expenses related to restructuring activities and lower gross margins more than offset an 8% revenue increase. Earnings of 53 cents per share (including 6 cents in restructuring costs, off-set by 6 cents in restructuring benefits) declined 8.8%, from 58 cents a year ago -- [and the recent earnings missed] our estimate of 58 cents and the Street's 56 cents. Third-quarter revenue of $16.2 billion, up 8% from last year, was in line with our estimate. Same-store sales improved to 2.8%, from 1.3% in the second quarter, driven by pharmacy [growth of] 3.8% and front-end [growth of] 0.8%. Total prescriptions filled grew 8.3%, reflecting market-share gains... versus an industry-wide growth rate of 2.6%. Market cap: $29.4 billion.

The drug store owner is slated to release their fiscal 3rd quarter earnings on Monday. Analysts consensus is for 0.56 cents bolstered by cost cutting efforts.

company cutting 1 billion over next two years in cost

"Why the heck aren't we down gigantically? Why aren't we looking ad major dislocations for retail and restaurants in anticipation that people won't go out because of the flu? Why, instead, are the "good" flu stocks like Walgreen (WAG) and CVS (CVS) reacting positively while the obvious sell candidates aren't going down?" "Bad News Can't Keep This Market Down," 4-28-09

Brian Gilmartin: "We sold the majority of our Walgreen(WAG Quote) today after a nice six- to eight-week run off the low $20s. Walgreen will report April '09 sales next week and the stock is struggling here around its 200-day moving average and the downward sloping trend line off the October '07 high." Read more here.

The drugstore chain was among the most active names on the NYSE Monday.

healthcare,stability

i'm heavily invested

The most salient issue today is the debate between Doug and Justin over CVS (CVS) and the pharmacy benefit managers, with Doug saying that CVS is losing share to MedcoHealth (MHS). I think CVS really stumbled when it bought Caremark, just when it had a chance to bury both Walgreen (WAG) and Rite Aid (RAD). I think that MedcoHealth is taking share, but I worry about major contracts coming up in several years that could wreck margins for all players.

From a recent Mad Money show: "No! That whole drug store business has gone to heck. I want you to sell, sell, sell."

forget it

52 week LOW

Solid growth, lousy stock

losing money

Overloved, under executing

Long term growth company that disappointed last quarter

have first to control their costs

slow mover

I liked the store and the balance sheet. Buying opportunity appeared during Wal Mart persciption drug announcement. Has been flat ever since.

Disappointed; with stores on every corner, has to have great value