Retail drugstore operator Walgreen
Despite having just over 5,000 stores in operation, the company's sales remain relatively robust, increasing 10.7% year over year. Revenues from those sites open more than a year are doing well, since comps were higher by 6.5% from the same period a year ago. Healthy pharmacy sales were responsible for much of this growth.
The flu season was much weaker this time around, making for fewer doctor visits this quarter in comparison to last year. This is good news for you as a sentient being, but not so hot for the investor in you if you happen to have shares of a drugstore operator. Additionally, Medicaid adoption issues in the state of Tennessee -- the same ones that Fred's
Management also added that they were pleased by results from the front end of the store, which saw comps growth of 5%. Sales in its general merchandising division were aided by strong Christmas and Valentine's Day seasons. Moreover, in the pre-recorded conference call, the company pointed toward its in-store digital photofinishing -- which works in concert with its online photo uploading service -- as an area that's doing particularly well.
In conjunction with its goal to achieve strong performance from existing sites, Walgreen is also going for growth through expansion. In fiscal 2005 the company opened 387 new stores, and has plans in place to have an additional 475 up and running by the end of fiscal 2006. These expansion efforts put it on track to have 7,000 operating sites by 2010.
When Charles Walgreen opened the first store in 1901, it's doubtful that he had any clue as to the kind of success that would arise from its humble beginnings, eventually making the store a household name. And Walgreen the corporation appears to be continuing down this successful path, rewarding shareholders along the way. If sales continue to grow at these solid rates, the company's expansion growth strategy should continue to provide value to investors.
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Fool contributor Jeremy MacNealy does not have any financial interest in any companies mentioned.