Walgreen Co. (WAG:US), the biggest U.S. retail drugstore chain, surged to its highest price in at least 34 years as the company reported May sales that topped analysts’ estimates.
Walgreen shares rose 4.2 percent to $74.56, the highest closing price on record since at least July 1980, according to data compiled by Bloomberg. Sales in comparable stores rose 4.4 percent in May, the Deerfield, Illinois-based company said in a statement, compared with analysts’ estimates of 4.1 percent.
Sales for the third quarter ended on May 31 increased 6.5 percent from a year earlier to $19.5 billion, the company said, higher than the $19.3 billion average of 20 analysts’ estimates (WAG:US)compiled by Bloomberg.
“The improved May quarter sales enhance visibility on earnings,” Mark Miller, an analyst with William Blair & Co. said in an e-mail to clients while maintaining annual earnings-per-share estimates.
Comparable same-store sales for the third quarter increased 5.1 percent, while prescriptions filled at comparable stores gained 4 percent. Walgreen operated 8,216 drugstores as of May 31, 120 more than a year earlier, the company said.
Walgreen owns 45 percent of Zug, Switzerland-based Alliance Boots GmbH and is considering buying the rest of Europe’s largest pharmacy chain, according to a report in the Sunday Times of London. Shares may rise as much as $15 if the company lowers its tax rate by moving the company headquarters in a tax inversion procedure through the deal, George Hill, an analyst at Deutsche Bank, said in a note to clients.
To contact the reporter on this story: Sonali Basak in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Reg Gale at email@example.com Andrew Pollack, Bruce Rule