(By Balachander) Drugstore chain Walgreen Co (NYSE: WAG) reported a drop in earnings for the first quarter amid a decline in comparable store sales and prescriptions filled. Shares retreated 3.75 percent in premarket on Friday.
For the quarter, adjusted earnings per share (EPS) fell 18 percent to 58 cents from 71 cents, while GAAP net earnings dropped 25.5 percent to $413 million.
Sales declined 4.6 percent to $17.31 billion, and front-end comparable store sales fell 2.0 percent. Brand-to-generic prescription drug conversions impacted sales by $883 million or 4.9 percentage points in the first quarter.
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Total sales in comparable stores declined 8.0 percent.
Prescription sales, which generated 63.8 percent of sales in the first quarter, decreased 7.2 percent, while prescription sales in comparable stores declined 11.3 percent.
Prescriptions filled dropped 3.2 percent to 201 million. Prescriptions filled in comparable stores declined 4.8 percent, though the key measure improved 3.2 percentage points from a fall of 8.0 percent in the prior quarter.
Wall Street analysts, on average, expected earnings of 70 cents per share on sales drop of 4.00 percent.
Gross profit margin improved 130 basis points to 29.4 percent from 28.1 percent because of a rise in generic prescription drugs dispensed, the company said.
As of Nov. 30, 2012, Walgreens operated 8,516 locations in all 50 states, the District of Columbia, Puerto Rico and Guam.
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WAG shares, which have been trading between $28.53 and $37.75 over the past year, closed Thursday's regular trading at $37.55.