Walgreen shares drop on sales miss

Shares of Walgreen Co. fell to their lowest price in almost five years Monday after the drugstore operator reported disappointing revenue in its fiscal fourth quarter, pointing to promotions that failed to pay off.

Walgreen said cost cuts and greater sales lifted its profit 12% for the quarter. But its revenue fell short of expectations, and the company said it engaged in too many discounts and promotions as it tried to ramp up sales in the face of difficult economic conditions. Customers did not pick up as many impulse items as Walgreen expected.

The stock shed $1.73, or 5.3%, to $31 after reaching a low of $30.26 earlier in the session. It last traded at that price Sept. 30, 2003.

Profit for the quarter ended Aug. 31 increased to $443 million, or 45 cents a share, from $396.5 million, or 40 cents. Results include a $79-million vacation accrual adjustment. Revenue rose 9% to $14.6 billion.

Analysts polled by Thomson Reuters expected a profit of 45 cents a share on revenue of $14.67 billion. Analyst estimates typically exclude one-time costs and gains.

Deerfield, Ill.-based Walgreen said it remained committed to its efforts to buy Walnut Creek, Calif.-based rival Longs Drug Stores Corp.