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Front-End Comps Slide But Walgreen Earnings Gain

Today, Walgreen Co. announced that adjusted fiscal 2013 second quarter net earnings were $915 million, or 96 cents per diluted share, versus $767 million, or 88 cents per diluted share, in the year-ago period. Walgreens 96 cents per diluted share earnings beat a published Thomson Reuters consensus analyst estimate by two cents.

Front-end comparable store sales, including general merchandise such as housewares, slipped 2.6% in the second quarter, with customer traffic in comparable stores decreasing 5.2% and basket size increasing 2.8%.

Total sales in comparable stores decreased 2.6%, the company stated. Second-quarter comparable store sales included 29 days in February 2012.

GAAP net earnings for the quarter were $756 million, or 79 cents per diluted share, versus $683 million, or 78 cents per diluted share, in the year-ago period, which benefited from one extra day because of leap year. Adjusted results from this year’s second quarter exclude the negative impact of 12 cents per diluted share in acquisition-related items and five cents per diluted share from a LIFO provision.

Second quarter sales were flat versus the prior-year period at $18.65 billion, the company noted. Prescription sales, which accounted for 61.1% of sales in the quarter, were flat, while comp prescription sales decreasing 2.7%.

“We are pleased with the quarter’s results as we saw substantial strength in our pharmacy performance, leading to strong earnings growth,” Walgreens president and CEO Greg Wasson said in comments on financial results. “With our Balance Rewards program now totaling more than 60 million enrollments, our preferred status with four national Medicare Part D plan sponsors and our very successful flu shot program this year, our customers are responding to our purpose to help them get, stay and live well.”