Walgreen 1Q14 Earnings Call Notes

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A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Sales up slightly earnings down

“For the quarter, sales were $19.6 billion, up 5.1% from $18.6 billion a year ago, driven in part by 4.3% increase in comp store sales. GAAP operating income for the quarter was $1.3 billion, up 4.9% from $1.2 billion last year. Adjusted operating income for the quarter was $1.3 billion, down 4.3% from $1.4 billion in second-quarter 2013. GAAP earnings per diluted share were $0.78 in the second quarter compared to $0.79 last year, down 1.3%.”

Largest purchasers of pharmaceuticals worldwide

“We continue to make good progress on our global initiatives. We are pleased with the performance of our global procurement organization. With the introduction of AmerisourceBergen, we believe we will be the largest purchaser of pharmaceuticals worldwide.”

Manufacturers like that

“Manufacturers have told us they appreciate our approach. We think this sets us apart from others in the market, benefits our organizations over the long haul and positions us and our pharmaceutical manufacturer partners extremely well for both short term and long term sustainable value creation.”

Closing some stores, but increasing net number

“between now and August, we intent to close 76 stores spread across the country importantly, overall this year including store closings, we expect to expand our store base by approximately 55 to 75 locations in fiscal 2014.”

Closures just 1% of base

“We looked at several factors in deciding which stores to close. We address the impact of increased density from our own stores, the impact of real estate positioning within the market and material changes to a store’s trade area. In total, this represents a very small portion less than 1% of our 8,200 plus store base.”

No plans to redomicile the company

“maybe I’d start with just retreating what I said, I think not on last earnings call, the one before that we have no plans to do so to do so, to do an inversion or redomicile the company.”