) to sell from neutral.
On Wednesday the drug-store chain forecast 38 cents to 41 cents fourth quarter earnings per share, and $1.40 to $1.50 2003 earnings per share. Analyst Monica Aggarwal says the degree of the earnings per share shortfall in the fourth quarter was surprising. She notes front comp-store sales of 0.8% were disappointing against very easy comparisons, and says the miss was mainly due to the weaker-than-expected holiday season, which impacted both sales and gross margins.
Aggarwal cut her $1.55 2003 earnings per share estimate to $1.35, and thinks there could be further risk to her numbers if business doesn't pick up in the second half of 2003.