Walgreen 1st-quarter profit rises

Drugstore operator Walgreen Co. on Friday said its fiscal first quarter profit rose 6 percent, helped by cost cutting and sales of private-label products as consumers sought out low-price goods.

Net income for the quarter ended Nov. 30 rose 6 percent to $455.5 million, or 46 cents per share, from $431.7 million, or 43 cents per share, in the prior-year period.

Revenue rose 10 percent to $14.03 billion, from $12.71 billion last year.

Analysts polled by Thomson Financial predicted a profit of 44 cents per share on revenue of $14.11 billion.

Same-store sales rose 5.4 percent during the quarter, including a 4.6 increase in front-end, or non-pharmacy, sales and a 5.9 increase in prescription same-store sales.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Walgreen said it lowered expenses by controlling store salaries and lowering advertising expenses.

Lower-priced generic drugs helped increase pharmacy gross profit margins, but that was offset by a shift toward the pharmacy business, which has lower margins than front-end products.

"We're seeing especially strong sales among our private-brand products as the economy softens and consumers search for more value," said Walgreen President Gregory D. Wasson in a statement.