Walgreen Co. Reports Record Sales, Earnings for Second Quarter and First Half 2003

Walgreen Co. today announced record sales and earnings for the second quarter and first half of fiscal 2003.

Net earnings for the quarter ended Feb. 28 were up 13.6 percent to $370.9 million or 36 cents per diluted share, from $326.6 million or 32 cents per diluted share in the same quarter a year ago.

First half net earnings climbed 17.6 percent to $602.5 million or 58 cents per share (diluted). Excluding gains of $17.0 million this year and $5.5 million last year from litigation settlements, first half earnings rose 16.3 percent to $591.9 million or 57 cents per share from last year's $509.1 million or 49 cents per share.

Sales increased 12.8 percent to a record $8.4 billion for the second quarter and 13.4 percent to $15.9 billion for the first half. Total sales in comparable stores (those open more than a year) were up 7.7 percent in the quarter.

Prescriptions, which accounted for 59 percent of sales in the quarter, climbed 17.8 percent. Prescription sales in comparable stores rose 13.3 percent in the quarter. Third party plans now account for 90 percent of all prescription sales.
"We're pleased to announce another record quarter despite the overall tough retail climate," said Chairman and CEO David Bernauer.

"Our core business of prescriptions, over-the-counter health products, cosmetics and convenience foods continues to perform very well. We also saw strong sales for the Valentine's Day holiday as our quick, hassle-free shopping experience brought in last-minute customers."

During the past year Walgreens registered national market share gains in 55 of its top 60 categories versus drugstore, grocery and mass merchant competition. "Market share and profitability go hand-in-hand," said Bernauer. "Our markets with the biggest share of the business are also our most profitable markets."

Walgreens is driving market share growth with its store expansion program. The company opened 154 new stores in the first half of fiscal 2003, with a net gain of 115 stores after relocations and closings. "We're anticipating opening 425 new stores this year, with a net increase of 345, slightly under our original projection,
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