In the fourth quarter ended August 31, Walgreen Co. GAAP net earnings were $353 million, or 39 cents per diluted share, versus $792 million, or 87 cents per diluted share, in the prior-year quarter, the company has announced. Adjusted earnings for the quarter were $553 million, or 63 cents per diluted share, versus $599 million, or 66 cents per diluted share, in the year-ago period.

An average analyst estimate from Thomson Reuters called for adjusted earnings of 56 cents per diluted share.

Adjusted fourth quarter results exclude the negative impacts of nine cents per diluted share related to the company's transaction with Alliance Boots GmbH, 10 cents per diluted share from the quarter's LIFO provision and five cents per diluted share in acquisition-related amortization costs. The company intends to account for its 45% investment in Alliance Boots using the equity method of accounting on a one-month lag basis, Walgreen said. Because the closing of the investment occurred within one month of the company's fiscal year end, Alliance Boots GmbH results are not reflected in Walgreen's reported net earnings for the fiscal quarter or year.

Last year's adjusted fourth quarter results exclude an after-tax gain of 30 cents per diluted share associated with the company's sale of its pharmacy benefits management business, Walgreens Health Initiatives, Inc., but also a negative impact of four cents per diluted share from the quarter's LIFO provision and five cents per diluted share in acquisition-related amortization costs.

Compared with the prior-year period, Walgreen suffered a negative impact from its split with the Express Scripts, Inc. pharmacy provider network net of six cents per diluted share in the fourth quarter and 21 cents per diluted share for the full fiscal year, the retailer said.

"This was a challenging but very important year for Walgreens, and we finished with a tough quarter," said Walgreen president and CEO Greg Wasson. “While we controlled costs and generated strong cash flow in the fourth quarter, our performance also reflected a strategic shift in promotional spending, a continued economically challenged consumer, and the impact from Express Scripts. Entering the new fiscal year, we believe we are positioned for growth as we benefit from the launch of our Balance Rewards loyalty program, our reentry into the Express Scripts pharmacy provider network and our execution of the Alliance Boots strategic partnership."

For the fiscal year, Walgreen said GAAP net earnings were $2.1 billion, or $2.42 per diluted share, versus $2.7 billion, or $2.94 per diluted share, in fiscal 2011. Adjusted net earnings were $2.6 billion, or $2.93 per diluted share, compared with $2.7 billion, or $2.93 per diluted share, in the fiscal year prior.

Adjusted net earnings in fiscal 2012 exclude the negative impacts of 11 cents per diluted share related to the company's transaction with Alliance Boots, 22 cents per diluted share from the year's LIFO provision and 18 cents per diluted share in acquisition-related amortization costs. Fiscal 2011 adjusted net earnings exclude the 30 cents per diluted share associated with the gain on the WHI sale and the negative impacts of 14 cents per diluted share from the year's LIFO provision and 15 cents per diluted share in acquisition-related amortization costs.

Fourth quarter sales slid 5% from the year-earlier quarter to $17.1 billion. For fiscal year 2012, sales slipped 0.8% from the prior year to $71.6 billion, Walgreen related. Front-end comparable store sales, including home goods and other general merchandise, decreased 1.3% in the fourth quarter, customer traffic in comparable stores decreased 3.2% and basket size increased 1.9%, while total sales in comparable stores decreased 8.7%.