Walgreen Co. Reports Record Sales, Earnings for First Quarter 2002

DEERFIELD, Ill. - Walgreen Co. today announced record sales and earnings for the first quarter of fiscal 2002. The company said it plans to open 475 new stores and open two new distribution centers during the fiscal year.

Net earnings for the quarter ended Nov. 30 were up 17.4 percent to $185.9 million or 18 cents per share, from $158.4 million or 15 cents per share a year ago. The results include a gain of $5.5 million for the final partial payment of the company's share of the brand name prescription drug antitrust litigation settlement.

Sales for the first quarter increased 16.8 percent to a record $6.6 billion. Total sales in comparable stores were up 10.7 percent in the quarter.

Prescriptions, which accounted for 60 percent of sales in the quarter, climbed 21.6 percent. Prescription sales in comparable stores rose 17.1 percent in the quarter. Third-party plans now account for 90 percent of all prescription sales.

"The nature of our business -- selling basic goods that everyone needs -- gives us the chance to perform well despite the current recession and tough retail environment," said Chairman Dan Jorndt. "It also means we will continue as planned with our expansion program."

The company plans to add 14,000 new jobs, open 475 new stores, spend $1.3 billion in capital expenditures and open two new distribution centers during fiscal 2002. Walgreens is on pace to have more than 6,000 stores by 2010.

"Not only do we have the financial resources to grow, but we have the pharmacists necessary to staff both our existing stores and new locations," said Jorndt. "We've been very successful in recruiting both new graduates and seasoned pharmacists."

President David Bernauer said the company has continued its record performance while maintaining its long-term strategy to lower prices in selected key categories. "We initiated this plan in the mid-1990s to become more price competitive," said Bernauer. "We've completed vitamins and skincare, and last spring we lowered prices on thousands of cosmetic items. The response has been very good."
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