On June 25, Walgreen (NYSE:WAG) released third-quarter earnings for the period ended May 31.
- Soaring sales of generic drugs helped revenue reach a record $13.7 billion.
- Margins improved across the board as management lowered its LIFO inflation index and began focusing on higher-margin generic drugs.
- The company is in its fourth year of posting comps in excess of 5% from front-end sales; comps rose 5.6% for the third quarter.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q3 2007 |
Q3 2006 |
Change | |
|---|---|---|---|
|
Sales |
$13,698.3 |
$12,175.2 |
12.5% |
|
Net Profit |
$561.2 |
$469.2 |
19.6% |
|
EPS |
$0.56 |
$0.46 |
21.7% |
|
Diluted Shares |
1,003.4 |
1,017.9 |
(1.4%) |
Get back to basics with the income statement.
Margin Checkup
|
Q3 2007 |
Q3 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
28.3% |
27.5% |
0.8 |
|
Operating Margin |
6.4% |
6.1% |
0.3 |
|
Net Margin |
4.1% |
3.9% |
0.3 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$758.1 |
$1,803.2 |
(58%) |
|
Accounts Rec. |
$2,003.6 |
$2,041.5 |
(1.9%) |
|
Inventory |
$6,455.7 |
$5,543.7 |
16.5% |
|
Liabilities |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$3,709.0 |
$3,731.0 |
(0.6%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
YTD 2007 |
YTD 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$2,083.9 |
$2,293.0 |
(9.1%) |
|
Capital Expenditures |
$1,252.1 |
$907.2 |
38% |
|
Free Cash Flow |
$831.8 |
$1,385.8 |
(40%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
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