Walgreen 2Q profit slips on tough comparison
DEERFIELD, Ill. (AP) -- Walgreen's fiscal second quarter earnings slipped from a year ago as the nation's largest drugstore chain reaped a smaller benefit from generic drugs and took a $60 million hit due to rough winter weather.
But the company's underlying performance impressed investors, and its shares rose, approaching the all-time high that they reached last month.
Walgreen executives said Tuesday that a wave of new generic drug introductions peaked in last year's quarter, which helped the company's bottom line then but made comparisons difficult for this year's quarter.
Generic drugs, which are cheaper alternatives to branded medicines, squeeze drugstore sales but improve profitability because they come with a wider margin between the cost for the pharmacy to purchase the drugs and the reimbursement it receives.
The company said Tuesday that the tough comparison between this year's quarters and last year will ease later this year. Walgreen expects generics to start helping its year-over-year performance again by the end of the fiscal year.
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